The bitcoin ATM has emerged as one of cryptocurrency's biggest threats

Bitcoin ATMs are a rapidly growing presence in the United States and, some experts say, a rapidly growing cybercrime menace. ATMs dealing in bitcoin are similar to their cash cousins: there are PINs to punch and withdrawal fees, just like any other ATM.

Unlike cash ATMs, though, the high value of crypto makes them prime targets for hackers. So, while a cash ATM tucked away between the snack cakes and energy drinks at a gas station may not draw much attention, a bitcoin ATM gets more scrutiny from bad actors.

"It's clear that these machines are particularly vulnerable to both physical and cyber threats, making them a prime target for hackers and thieves," said Timothy Bates, clinical professor of cybersecurityat the University of Michigan's College of Innovation and Technology.

Bitcoin ATMs can be susceptible to attacks where hackers install malware on the machines to capture private keys, steal funds, or manipulate transactions, which Bates said is "especially concerning for ATMs that may not receive regular software updates or security patches." Network vulnerabilities are also a weak spot. "If the machine's network communications are not adequately secured, attackers can intercept data transfers between the ATM and the server, leading to data theft or unauthorized access," Bates said.

Whether it's hackers or scammers, the government is sounding the alarm about bitcoin ATMs. The Federal Trade Commission reported this week that scam incidents have risen by 1,000% since 2020.

Ironically, a bitcoin ATM's risks are directly related to its strengths, according to Joe Dobson, principal analyst at Mandiant, a Google Cloud-owned cybersecurity company. Bitcoin is decentralized, permission-less, and immutable. "A transaction cannot