Who Really Uses Bitcoin ATMs? The Communities the Headlines Miss

The Headline That Gets It Wrong

Open any newspaper covering Bitcoin ATMs and you will find a consistent framing: vulnerable seniors, scam calls, cash disappearing into machines. The coverage is not fabricated. Elder fraud involving Bitcoin ATMs is real, costly, and worth addressing. But the coverage captures one end of the story while leaving the other — the much larger other — almost entirely untold.

The Federal Reserve Bank of Kansas City, in a 2023 research briefing, examined who actually uses Bitcoin ATMs and why. Its finding was not what the headlines suggest: a majority of Bitcoin ATM users buy cryptocurrency for person-to-person transactions or remittances, not speculation. The typical user earns under $80,000, belongs to a minority group, and lives in an immigrant or low-income neighborhood. They are not chasing crypto gains. They are doing something far more ordinary: trying to move money, pay bills, or participate in a digital economy that was designed for people with bank accounts — which they do not have.

This is the story that rarely gets told. It is the story of 24.6 million American households structurally excluded from the banking system, for whom a Bitcoin ATM is not a speculative instrument but a utility — the same way a check-cashing window or a money order desk is a utility, but one that connects to something larger.

24.6 Million Americans Left Behind

The FDIC's 2023 National Survey of Unbanked and Underbanked Households — the authoritative benchmark for financial inclusion data in the United States — found that 4.2% of U.S. households, representing roughly 5.6 million discrete households, are entirely unbanked: no checking account, no savings account, no relationship whatsoever with a federally insured depository institution. An additional 14.2% of households — 19 million more — are underbanked: they technically hold a bank account but rely primarily on nonbank financial services for their day-to-day financial lives. Cumulatively, 18.4% of American households — approximately 24.6 million — remain structurally outside the mainstream financial ecosystem.

The demographics of exclusion follow clear, persistent patterns. Native American households are unbanked at a rate of 12.2% — more than six times the white household rate of 1.9%. Black households: 10.6%. Hispanic households: 9.5%. Households earning under $15,000 per year: 21.8%, meaning roughly one in five of America's poorest families has no bank account at all. Households without a high school diploma: 19.7%. Households with a disability: 11.2%.

These are not people who forgot to open an account. The decision to remain unbanked is almost never a matter of preference. It is the direct result of compounding structural barriers that the traditional banking industry has erected and maintained. The average minimum balance required to waive monthly maintenance fees on an interest-bearing checking account has reached a record $10,705 — a figure that is simply impossible to maintain for someone living paycheck to paycheck. Over 80% of banks and credit unions use ChexSystems, a consumer reporting agency that tracks banking infractions, to screen applicants; a single bounced check or briefly overdrawn balance can result in a multi-year exile from the formal banking sector. Approximately 13% of unbanked households cite a lack of personal identification as their primary barrier. And between 2019 and 2023, the United States saw 5,413 bank branch closures, leaving 12.3 million Americans in banking deserts — with majority-Black communities gaining desert status at 10.1%, more than 1.5 times the national average.

For these 24.6 million households, the Bitcoin ATM is often the only regulated, physical cash-to-digital conversion point they can access without a pre-existing bank account. It does not require a minimum balance. It does not run a ChexSystems check. It does not close at 4pm on weekdays. It is there, in the corner store or gas station, at 11pm on a Tuesday, accepting cash.

What Bitcoin ATMs Actually Do

Industry behavioral data makes clear that the users of these machines are not sophisticated traders. A survey conducted by CoinFlip, the second-largest U.S. Bitcoin ATM operator, found that 74% of their users made their very first cryptocurrency transaction at a physical kiosk. They came to the machine because they had cash and needed access to digital financial infrastructure — not because they had a trading thesis.

Research consistently identifies four core reasons the unbanked and underbanked use Bitcoin ATMs:

Conversion. Transforming physical cash into a digital asset that can be sent, stored, or used online. For people who operate entirely in cash — 66.2% of unbanked households use only cash for day-to-day transactions, per the FDIC — this is the entry point to the digital economy.

Obligations. Many Bitcoin ATM networks integrate bill-payment functionality, allowing users to pay utilities, rent, and other recurring bills in cash at the machine. For someone without a bank account, paying a bill online is not straightforward. The machine makes it possible.

Access. Bitcoin ATMs operate 24 hours a day in retail environments — gas stations, convenience stores, pharmacies — that remain open when bank branches have long since closed. For shift workers, gig economy workers, and anyone whose schedule does not align with banking hours, this availability is not a minor convenience. It is access.

Control. Tangible printed receipts, physical transaction confirmation, and the ability to budget strictly in cash without exposure to automated overdraft fees that can convert a $26 shortfall into a $35 fee at an effective annual percentage rate exceeding 16,000%. The machine gives users a financial interaction they can see and control, without the hidden landmines of the overdraft economy.

The Use Cases the Headlines Miss

Sending Money Home

Perhaps the single most common Bitcoin ATM use case is also the one least mentioned in coverage of the industry: sending money across borders to family who need it.

The Federal Reserve Bank of Kansas City documented that many Bitcoin ATMs "appear in immigrant neighborhoods in major cities" precisely because their operators recognize remittances as the primary use case. Bitcoin Depot, the largest U.S. operator with over 8,300 machines, has explicitly identified remittances as its number-one customer use case.

The numbers behind this are significant. In the U.S.–Mexico corridor alone, Bitso processed $6.5 billion in crypto remittances in 2024 — more than 10% of total corridor volume. Félix Pago, a WhatsApp-based service using USDC stablecoins, processed over $1 billion in 2024 at just $2.50 per transaction, compared to the $10–14 typically charged by Western Union.

Maria Salgado, an immigrant from Oaxaca who worked in Los Angeles, sent money home for 24 years to fund her sister's kidney treatments. She paid roughly $10 per $200 sent through Western Union. After switching to crypto, her costs dropped to as low as $1 per $1,000. The savings were not abstract. They were dialysis treatments.

It is worth acknowledging an honest tension here: Bitcoin ATMs themselves charge transaction fees typically ranging from 10% to 25%, which are higher than what an established crypto exchange charges. The Kansas City Fed documented this clearly. But the comparison is analytically incomplete. Online exchanges require linked bank accounts and debit cards — exactly the infrastructure that the 24.6 million unbanked households do not have. For them, the relevant comparison is not Coinbase at 0.5%. It is Western Union at 8%, check-cashing services at 1.5–5% of face value, and payday loans at 391% APR. Against that peer group, the Bitcoin ATM is not extractive. It is the entry point to something cheaper.

When the Banking System Has Closed Its Doors

Ubaydah Baa'ith learned about Bitcoin in a halfway house in 2018, after a conviction for armed robbery. He was trying to rebuild. He had no bank account — not because he had not tried to open one, but because the banking system had decided his history made him unacceptable. He now manages a project in Virginia helping hundreds of returning citizens access financial tools. "The number one thing people get incarcerated for is money-related issues," he has said, "like robberies, and habits that are learned from generational poverty issues." Bitcoin, for him and for the people he works with, was not a speculation. It was the first financial tool that did not require someone else's permission to use.

His story is not unusual. ChexSystems maintains derogatory records for up to five years and facilitates the denial of accounts to over one million people annually. A single bounced check, a briefly overdrawn account, a fee that went unpaid during a period of hardship — any of these can trigger a multi-year banking exile. For the formerly incarcerated, the barriers are even higher. For people without stable identification, higher still.

Geographic analysis of Bitcoin ATM placement confirms the pattern. A 2023 investigation overlaying Kansas City's Bitcoin ATM locations with census data found them concentrated in low-income, Hispanic, African American, and immigrant neighborhoods. Coinsource, a major operator, reports that 40% of its users identify as African American and over 13% as Hispanic or Latinx. These machines are not placed in low-income neighborhoods because operators are predatory. They are placed there because that is where the people who need them live.

Financial Privacy as Survival

DomesticShelters.org, one of the leading domestic violence advocacy organizations in the United States, has noted that researchers believe 99% of domestic violence survivors experience financial abuse. Abusive partners monitor bank statements. They control account access. They track spending through shared accounts. For survivors trying to build a hidden financial reserve — to accumulate enough to leave — the traditional banking system is not safe. Every transaction is visible.

Bitcoin ATMs offer something that no bank account can: a cash-in, cash-out transaction that does not appear on a statement a controlling partner can access. Women in Distress, a domestic violence charity, accepts Bitcoin donations and educates survivors about its potential for building hidden financial reserves. Claire Hunsaker, a chartered financial consultant who works with survivors, has explained: "Cryptocurrency and blockchain offer a new way for people to store and transfer money without the need to be connected to the traditional banking system. This independence and privacy could be valuable for people experiencing financial abuse."

This use case extends internationally. Roya Mahboob, named to TIME's 100 Most Influential People in 2013, began paying female employees in Bitcoin in Afghanistan because Afghan women could not open bank accounts without male intermediaries. At least 2,000 women received Bitcoin salaries. When the Taliban forced some of them to flee, their Bitcoin came with them — unconfiscatable, crossing borders invisibly, redeemable wherever they landed.

When Banks Go Dark

After Hurricane Maria killed nearly 3,000 people and destroyed 80% of Puerto Rico's crops in 2017, the banking infrastructure that survived was overwhelmed and geographically inaccessible. Bitcoin ATMs from Bitstop and Athena Bitcoin were installed in affected areas specifically to provide financial access where bank branches had collapsed or remained closed for weeks.

Ukraine's 2022 invasion triggered what Elliptic called "the largest crypto humanitarian campaign in history": $54.7 million in over 102,000 donations within two weeks. The Ukrainian government solicited cryptocurrency via Twitter after martial law imposed restrictions on conventional digital transfers. Cryptocurrency crossed borders, ignored sanctions complications, and arrived — because it did not require a correspondent bank to process it.

During Hurricane Helene in 2024, a North Carolina Bitcoin community deployed a search-and-rescue convoy equipped with satellite communications and medical supplies, funded by Bitcoin donations routed through channels that remained operational when local financial infrastructure did not. The Giving Block facilitated over $1 billion in crypto donations to nonprofits in 2024 alone, with the average crypto donation running 82 times larger than the average online cash gift.

Fraud in Context: The Numbers They Don't Show You

The fraud concerns motivating legislative proposals to restrict or ban Bitcoin ATMs are real. The FBI's Internet Crime Complaint Center received 10,956 formal complaints involving cryptocurrency kiosks in 2024, representing approximately $246.7 million in reported losses — a 99% increase in complaint volume and a 31% increase in financial losses from the prior year. Older adults account for over 71% of all reported Bitcoin ATM scam losses. These numbers are serious.

They also need to be read in full context. The same FBI data reports total internet crime losses of approximately $16.6 billion in 2024. Bitcoin ATM fraud represents 1.5% of that total.

The payment method comparison is revealing:

• Check fraud (global): $26.6 billion
• Bank transfers and business email compromise: $2.09 billion — 8.5 times larger than Bitcoin ATM fraud
• Gift cards: $1.03 billion — 4.2 times larger
• Wire transfers: $287 million — larger than Bitcoin ATMs
• Bitcoin ATMs: $246.7 million

No one is proposing to ban wire transfers. No one is proposing to shut down Western Union. The institution with the highest regulatory burden and the lowest net profit margin in the alternative financial services sector — the Bitcoin ATM operator — is the one facing legislative bans. The institutions extracting the most from underbanked populations face no comparable threat.

Industry-wide data from Chainalysis shows that 98.8% of all Bitcoin ATM transactions are legitimate. The illicit transaction rate of 1.2% is comparable to or below the rates observed in other financial sectors. For context, the United Nations Office on Drugs and Crime estimates that 2–5% of global GDP — between $800 billion and $2 trillion — is laundered annually through the traditional banking system. The comparison is not favorable to Bitcoin ATMs' critics.

What Happens When You Ban the Bridge

The core policy argument for restricting Bitcoin ATMs is that doing so will reduce fraud. The evidence does not support this conclusion.

Banning Bitcoin ATMs would not eliminate the upstream fraud infrastructure. The scam call still originates from a VoIP provider with ineffective identity screening. The spoofed caller ID still reaches the victim. The social engineering still works. The victim still goes to the bank and withdraws cash. The only thing that changes is the final payment method.

Instead of a Bitcoin ATM, the victim is directed to wire transfer ($287M in fraud losses in 2024), gift cards ($1.03B), cash by mail (untraceable, unrecoverable), or peer-to-peer payment apps with minimal fraud prevention compared to regulated operators. None of these alternatives offer the compliance infrastructure that a regulated Bitcoin ATM operator provides: mandatory KYC, SAR filing, trained BSA officer monitoring, and live human intervention.

And the communities that lose access are precisely the communities that the banking system has already failed. A Bitcoin ATM ban falls heaviest on Native American households (12.2% unbanked), Black households (10.6%), Hispanic households (9.5%), households earning under $15,000 (21.8%), and households without a high school diploma (19.7%). The fraud migrates to unregulated channels. The financial exclusion deepens.

The Most Regulated Bridge in Finance

There is a persistent irony at the center of this policy debate. Bitcoin ATM operators are not operating in a regulatory vacuum. They are among the most heavily regulated financial entities in the United States — far more regulated, on many dimensions, than the telecom providers where virtually all fraud actually originates.

A licensed Bitcoin ATM operator must maintain: mandatory FinCEN registration as a Money Services Business; a full five-pillar Anti-Money Laundering program including internal controls, compliance officer designation, employee training, independent review, and risk assessment; Suspicious Activity Report filing for transactions of $2,000 or more (lower than the $5,000 threshold required for banks); Currency Transaction Reports for transactions over $10,000; state money transmitter licenses in 28+ states with surety bond requirements often reaching millions of dollars; OFAC screening against the Specially Designated Nationals list; and criminal penalties for violations, including up to five years imprisonment for operating an unlicensed money-transmitting business. Annual compliance costs for a major BTM operator range from $500,000 to over $2 million.

A VoIP telecom provider — the entity that actually initiates the fraud, provides the spoofed caller ID, and enables the scammer to reach the victim — can begin operating with a $100 filing fee and no meaningful compliance infrastructure.

At Byte Federal, we have built what we believe is the industry's most comprehensive fraud prevention system on top of these mandatory requirements. Banking-grade KYC with government-issued ID verification, selfie-to-ID biometric matching, SSN verification, and OFAC screening for all customers — exceeding the Customer Identification Program requirements applicable to banks. Trained BSA officers who monitor transactions for coercion indicators in real time, with authority to place transaction holds for review. Mandatory 30-second on-screen scam warnings with randomized button placement. And for every customer over 60 identified as a potential scam victim: a live human call from a trained compliance team member, in real time, before the transaction completes.

That last layer achieves an 84% elder fraud prevention rate — a figure drawn from our own internal compliance data across 2024 and 2025. Not 84% of suspicious transactions referred to law enforcement. 84% of potential elderly victims who do not complete the fraudulent transaction after speaking with a real person who explains what is happening to them.

This is what it looks like to protect the bridge rather than destroy it.

The Honest Tension

None of this is an argument that Bitcoin ATMs are perfect instruments of financial inclusion, or that the industry has no problems to address. The transaction fees — which range from 10% to 25% across the industry — are real costs that fall on people who can least afford them. The geographic clustering in low-income neighborhoods raises legitimate questions about access and equity that deserve honest engagement.

The strongest cost-savings evidence for Bitcoin ATMs comes not from the ATM transaction itself but from what it enables downstream: Lightning Network apps, stablecoin rails, and platforms like Bitso and Félix Pago that have driven remittance costs below 1%. The Bitcoin ATM functions as the cash on-ramp for people who lack the documentation, credit history, or banking access to reach those cheaper rails any other way. That gap — between the ATM's fee and the alternative of complete financial exclusion — is where the genuine social value lives.

The policy question is not whether Bitcoin ATMs are expensive. They are. The question is: expensive compared to what? Compared to Coinbase, they are expensive. Compared to a check-cashing service that charges 5% of face value, a payday lender charging 391% APR, a Western Union corridor that keeps 22 cents of every dollar in net profit margin, or simply having no access to the digital economy at all — the picture looks quite different.

The solution to fraud is not to remove the most regulated, most monitored, most compliant payment method from the communities that depend on it while leaving every other channel intact. The solution is to apply the same compliance standards upstream — to the telecom providers who make the fraud possible in the first place — while strengthening the protections at the kiosk itself.

The bridge serves 24.6 million people. It deserves to be secured, not destroyed.

Want to understand how Byte Federal protects customers at the machine? Read our full fraud prevention research. Or learn how Bitcoin ATMs fit into the broader history of bearer instruments and financial sovereignty.

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Frequently Asked Questions

Who actually uses Bitcoin ATMs?

According to Federal Reserve research, the majority of Bitcoin ATM users buy cryptocurrency for person-to-person transactions or remittances, not investment. The typical user earns under $80,000, belongs to a minority group, and lives in an immigrant or low-income neighborhood. 74% of users at one major operator made their very first crypto transaction at a physical kiosk. They are largely people without traditional bank accounts seeking access to digital financial services.

Are Bitcoin ATMs predatory toward low-income communities?

Bitcoin ATMs charge fees of 10–25%, which are higher than online exchanges. But online exchanges require linked bank accounts — infrastructure that 24.6 million unbanked Americans don't have. The relevant comparison is check-cashing services (1.5–5% of face value), Western Union (5–8% per transfer), and payday loans (391% APR). Against that peer group, Bitcoin ATMs are competitive on cost and unique in providing a path to lower-cost digital rails like stablecoins and Lightning Network. The fee is a one-time access cost, not a recurring debt trap.

How much fraud actually involves Bitcoin ATMs?

Bitcoin ATM fraud represents 1.5% of total internet crime losses, according to the FBI's 2024 Internet Crime Report. The $246.7 million in Bitcoin ATM fraud compares to $2.09 billion in bank transfer/BEC fraud, $1.03 billion in gift card fraud, and $26.6 billion in global check fraud. 98.8% of all Bitcoin ATM transactions are legitimate, per Chainalysis data. The fraud is real and worth addressing — but banning ATMs would redirect victims to less-regulated payment methods, not eliminate the scams.

What happens to fraud victims if Bitcoin ATMs are banned?

The scam infrastructure — the VoIP call, the spoofed caller ID, the social engineering — remains intact regardless of what payment method is available. Research shows criminals adapt to use whichever payment channel is available. If Bitcoin ATMs are removed, victims are directed to wire transfers, gift cards, or cash by mail — payment methods with less compliance oversight, no KYC, and no live human intervention. The fraud migrates; the communities that depended on the ATMs for legitimate financial access lose that access permanently.

What does Byte Federal do to prevent fraud?

Byte Federal's five-layer fraud prevention system includes banking-grade KYC with biometric matching, trained BSA officer transaction monitoring, mandatory on-screen scam education warnings, anti-fraud Terms of Service, and live human outreach calls to every customer over 60 identified as a potential scam victim — achieving an 84% elder fraud prevention rate from internal compliance data (2024–2025). Annual compliance costs exceed $500,000. By contrast, the VoIP providers where most scams originate can operate with a $100 filing fee and no AML requirements.

Are Bitcoin ATMs heavily regulated?

Yes — among the most heavily regulated financial entities in the United States. Requirements include FinCEN registration, a mandatory five-pillar AML program, Suspicious Activity Reports for transactions over $2,000 (lower than the bank threshold of $5,000), Currency Transaction Reports over $10,000, state money transmitter licenses in 28+ states, OFAC screening, and criminal penalties for violations. A major operator spends $500,000 to over $2 million annually on compliance. A VoIP telecom provider — where virtually all Bitcoin ATM fraud originates — can start with a $100 filing fee.