Peabody to ban Bitcoin ATMs after
residents scammed
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By Caroline Enos | Staff Writer
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Oct 25, 2025
PEABODY — An ordinance
before the City Council would ban Bitcoin machines in the city after Peabody
residents have lost well over $100,000 in scams involving these machines.
Councilors voted
unanimously Thursday night to draft and advertise the ordinance change banning
all machines that sell virtual currency including but not limited to Bitcoin.
They are expected to
adopt the ordinance in a later final vote.
Peabody would become
the third city in the state to implement this ban. Gloucester and Waltham both
approved similar bans last month through ordinances Peabody used to model its
own.
“What we’ve seen is
the most vulnerable folks in our society have been targeted, particularly the
elderly people who are very vulnerable to being afraid and wanting to make sure
they’re following rules,” Essex County District Attorney Paul Tucker said at
the council’s Legal Affairs subcommittee meeting Thursday night.
Scammers often pose as
federal agents with the FBI or Homeland Security. Sometimes they create fake
romances with victims over weeks or months, or install viruses on their
computers that lead to a victim speaking with a scammer pretending to be a tech
support agent.
In an incident
recently investigated by the Essex County DA’s office, a scammer convinced a
victim that they would be ensnared in a pedophilia ring if they didn’t send
money through Bitcoin machines, Tucker said.
The perpetrators
convince victims to go to their banks and withdraw large sums of cash, often
staying on the phone to coach them on what to say when bank tellers question
why they are taking out so much money.
Victims then go to
deposit the cash into these virtual currency machines, which resemble coin
machines and ATMs. They deposit their money into them to typically buy Bitcoin,
a virtual currency that has gained popularity over the last decade, and send it
to the scammers.
But most of the time
these machines are being used, it’s by victims who have been convinced to send
Bitcoin to scammers, Peabody Police Detective David Bettencourt told the City
Council on Thursday.
“Usually, the only money
in these machines are the victims’ funds,” Bettencourt said. “If any of us are
gonna buy Bitcoin, we’re gonna call a bank and buy Bitcoin. We’re not gonna
walk into 7-Eleven and put money into a machine.”
Once that money is in
the machine, victims almost never get that money back — even after the police
are involved, he said.
More than $11 million
has been reported stolen in Essex County through these scams this year alone.
That’s probably only a third of what has actually been stolen since January,
Tucker said.
One Essex County
couple who are in their mid-80s recently lost more than $100,000 — the
remainder of their life savings — through a scam involving a Bitcoin machine,
Tucker said. A woman in Peabody lost $42,000 over several weeks in July.
A Salem woman who has
a law degree and worked for the state for 30 years also fell victim to the
scam. She used a Bitcoin machine on Canal Street to send scammers $13,000, then
bought $1,000 worth of gift cards at Target at the their request so they could
redeem their value, another common scam.
“When somebody tells
you that they can’t believe that they’ve been scammed, believe them, because
everybody we talked to said, ‘I can’t believe that this happened to me,’”
Tucker said.
Legislators on Beacon
Hill are working on bills to ban these machines or at least limit how much
users can deposit in a single day. But due to pushback from the Bitcoin
industry, it will be a while before laws like this go on the books, Tucker
said.
Bitcoin machine
companies, particularly Bitcoin Depot, largely have not cooperated with Peabody
detectives who investigate these scams. One went so far as to threaten to
report a Peabody detective to the POST Commission for taking a machine out of
service after it was used in a scam, Bettencourt said.
These companies argue
that because they aren’t the scammers, they shouldn’t lose out on the money
deposited into their machines, he said.
There are 16 Bitcoin
machines currently in the city. Users are often charged between 30% and 50% in
fees, compared to cryptocurrency apps that typically keep these fees between 1%
and 3%.
A study conducted by
the Iowa Attorney General’s office found between 94% and 98% of all deposits
made on these machines in that state were sent to scammers coercing victims.
Because they are used
in scams so frequently, Bitcoin machine companies have at times included
language in contracts preventing the businesses who house the machines from
speaking with police in scam investigations.
“To my mind, that
shows actual knowledge that these are being used for fraud, if they’re actually
encouraging store owners not to interfere,” said Scott Dullea, chief legal
counsel for the Essex County DA’s office.
Businesses housing
these machines are financially incentivized to not report these scams because
that could stop payments to them, Dullea said.
City councilors shared
support for banning the machines during Thursday’s discussion.
“This is disgusting,
and this is all educational to me, and I’m in law enforcement,” Councilor
at-Large Anne Manning-Martin said. “We certainly need to get this out to
everybody.”
Nothing will stop
scammers from sending victims to machines in neighboring communities where they
remain legal, Ward 2 Councilor Pete McGinn said.
That’s why the DA’s
office is working with other Essex County communities, including Salem and
Beverly, to adopt ordinances like what’s being considered in Peabody, Dullea
said.
“This calls out for a
bigger solution, a statewide solution, and that’s currently being undertaken.
Obviously, that takes a lot of time,” Dullea said. “We’ve decided that this is
probably the best stop gap to take right now to protect local residents.”
Contact Caroline Enos
at CEnos@northofboston.com .
