On August 4, 2025, the Financial Crimes undercover Network (Fincen) published a notice Warning of financial institutions to climb illegal activity involving convertible virtual currency kiosks (CVC). The opinion cites an increased abusive use of CVC kiosks in fraud regimes, drug trafficking and cybercrime, and identifies the potential violations of the operators of the Bank Secrecy Act (BSA) due to the registration, the implementation of anti-flange programs (LMA), or the reasonable customer diligence.
CVC kiosks – also known as automatic distributors of crypto tickets – are consumers to exchange money or cards for cryptocurrency. Although marketed as practical access points, they are also increasingly exploited by criminals, especially in scams targeting the elderly. Fincen’s analysis is based on law enforcement surveys, documents of the banking secrecy law and consumer complaints.
The main results of the opinion include:
- The typologies of fraud and fraud have increased. Scammers frequently target the elderly by usurging the identity of technological support or government agencies, asking victims to transfer funds via CVC kiosks. More than two thirds of the losses linked to the kiosk reported in 2024 were suffered by the elderly.
- Drug cartels whiten funds via kiosks. The DEA reports that criminal organizations use kiosks in areas with high traffic to whiten the drug product, especially in states with a dense kiosk distribution.
- Non -restorative not in accordance with BSA obligations. Fincen noted that many CVC kiosk operators fail to register as a business of monetary services or implement the required AML / CFT programs, which makes them particularly vulnerable to abuses.
Fincen has found red flags in many CFC kiosk transactions. Many transactions are structured below to report thresholds, use several machines through the courts or are transactions linked to known fraudulent portfolios.
Put it into practice: The opinion is based on Fincen 2019 Advisory On illicit activity involving CVC and occurs in the middle of the growing state and federal examination of CVC kiosks. Financial institutions should also assess whether relations with suppliers or corresponding bank links expose them to the risks linked to the kiosk, in particular as regulatory expectations are evolving.
