FinCEN Warns Financial Institutions on Growing Scam Risks Linked to Cryptocurrency Kiosks

The Financial Crimes Enforcement Network (FinCEN) has issued a warning to financial institutions, urging heightened vigilance in detecting and reporting suspicious activity linked to convertible virtual currency (CVC) kiosks. These kiosks, often marketed as a quick and convenient way for consumers to buy or sell digital assets, are increasingly being exploited by criminals for scams and other illicit activities.

FinCEN’s notice underscores that the threat is significantly worsened when CVC kiosk operators fail to meet compliance obligations under the Bank Secrecy Act (BSA). The regulator highlights fraud, cyber‑enabled crime, and drug trafficking organisation activity as key areas of concern — all of which are included in the United States’ Anti‑Money Laundering and Countering the Financing of Terrorism National Priorities.

The advisory also draws attention to a surge in scam payments facilitated through these kiosks, including technology support scams, customer service fraud, and bank impersonation schemes. Many of these fraudulent operations disproportionately target older adults, resulting in significant financial losses.

Financial institutions are reminded of their critical role in safeguarding the digital asset ecosystem by monitoring for red‑flag indicators and submitting timely suspicious activity reports (SARs) in line with BSA requirements.

FinCEN Director Andrea Gacki stressed the importance of industry cooperation, noting that criminals are quick to exploit innovative payment technologies. She said:

The United States is committed to safeguarding the digital asset ecosystem for legitimate businesses and consumers, and financial institutions are a critical partner in that effort.

This development signals a tightening regulatory focus on cryptocurrency kiosk operations and reinforces the expectation that both kiosk operators and financial institutions take proactive steps to prevent their misuse for money laundering, fraud, and other financial crimes.

Read the notice here.