Cryptocurrency ATMs have proliferated across San Francisco, with operators claiming they serve the unbanked and underbanked by providing access to digital financial services. Bitcoin ATM operators, such as Bitcoin Depot, assert that their machines help bridge the gap between traditional banking systems and underserved communities. They argue that these machines offer an alternative to traditional financial institutions, which have historically underserved low-income and minority communities.

Reality of Usage

Bitcoin ATMs are often used by different demographics than intended. While a tiny fraction of users may indeed be unbanked or underbanked, these machines are mostly associated with illicit activities, such as money laundering and drug trade. The high fees charged by these ATMs—often up to 20%—disproportionately affect low-income users, undermining the financial inclusion narrative.

In areas like Kansas City, Bitcoin ATMs are concentrated in low-income neighborhoods, with critics accusing operators of exploiting financially vulnerable residents. Similarly, in San Francisco, while Bitcoin ATMs are accessible in various neighborhoods, their placement and usage patterns raise concerns about their actual impact on financial inclusion.

Scams and Illicit Activities

Bitcoin ATMs have become a tool for scammers, who exploit vulnerable individuals by directing them to deposit cash into these machines. Fraud losses at Bitcoin ATMs have skyrocketed, with seniors being disproportionately affected. The irreversible nature of cryptocurrency transactions makes recovery of stolen funds nearly impossible. For more information on these scams, see reports from the FTC. These machines often target low-income communities with high fees and facilitate illicit activities. It's really frustrating to see so many of these in convenience stores knowing another elderly is likely next to be tricked.