When the victim uses the machine to buy virtual currency, it asks them to scan a QR code representing a destination address for the funds. The machine offers to print out a paper wallet — a QR code the victim can scan and use to store their withdrawn cryptocurrency. However, the scammers generate a QR code representing a cryptocurrency address in their own wallet and give this to the victim to scan instead.
“Often the scammer is in constant online communication with the victim and provides step-by-step instructions until the payment is completed,” the announcement said.
The approach works for any online scam requiring payments between victims and gives the scammer three advantages.
First, it’s relatively frictionless compared with older methods, such as sending money via Western Union or obtaining gift cards.
Second, scammers can receive the payments anonymously anywhere in the world.
Finally, the payments are irreversible. “Once a victim makes the payment, the recipient instantly owns the cryptocurrency, and often immediately transfers the funds into an account overseas,” said the Bureau. “This differs from traditional bank transfers or wires where a payment…