(KTLA) – When you think of buying or selling cryptocurrency, you might think of high-tech trading rooms. You may be thinking of cutting-edge applications.
What you probably don’t think of is an ATM at a gas station convenience store or payday loan store.
Increasingly, however, is the number of working-class people encountering crypto. And consumer advocates say that may not be a good thing.
“These ATMs are set up in locations where retail consumers who don’t have a lot of investment information, but are excited about cryptocurrency and want to get involved, are most likely to find them. “said Mark Hays, senior policy analyst for the advocacy group Americans for Financial Reform.
There are around 2,000 crypto ATMs in Los Angeles, mostly dealing with Bitcoin. They allow people to exchange dollars for digital currency, for a fee of around 15%.
It’s not that there is anything wrong with investing in Bitcoin or any other cryptocurrency. It’s just that it’s risky. Very risk.
Remember the “Fortune Favors the Brave” ad for Crypto.com featuring Matt Damon? Since the advertisement launched last October, the value of Bitcoin has decreased by around 60%.
In other words, if you invested $1,000 following Damon’s advice, you would now have maybe $400 to show for it.
“It’s something weird,” Anas Elshahawy, a cashier at a convenience store in the Crenshaw district, told KTLA.
He said that about half a dozen people use his store’s bitcoin machine every week.
Crypto ATMs can be used to transfer money overseas, especially to El Salvador, which has made bitcoin a national currency.
Critics said they were also used by drug dealers and fraudsters to launder money.
The industry says the machines allow people without bank accounts to get into digital currencies.
“We are well aware that there is a belief that only criminals use it, that only nefarious activity and scam victims go to ATMs,” said Seth Sattler, executive director of the Cryptocurrency Compliance Cooperative, an industrial group.
“So as an industry, we are actively trying to prevent that to the best of our abilities.”
Hays at Americans for Financial Reform said there may be nothing wrong with most crypto transactions. But he points out that largely unregulated digital currencies often look more like gambling than investing.
“Putting your money in a Bitcoin ATM and hoping you watch the line go up and bank is like walking into a casino,” he said. “Of course you can make money. But the odds are usually stacked against you.
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