Bitcoin shakedown: Montana State Auditor James Brown sounds alarm on ATM scams

Dan Astin | Livingston Enterprise

 
August 21, 2025

LIVINGSTON — James Brown, Montana’s state auditor and commissioner of securities and insurance, visited Livingston and Big Timber this week and warned the public about scams involving cryptocurrency.

“We are seeing a huge uptick in fraud schemes involving digital currencies in 2025,” Brown told the Livingston Enterprise on Tuesday.

His office serves as a complaints repository and criminal justice center for securities fraud and crypto currency scams. The visit was part of a larger awareness campaign informing constituents on different types of fraud.

Americans reported losing $9.3 billion to crypto-related scams in 2024, according to an annual report from the FBI’s Internet Crime Complaint Center. The statistic represents a record high, and a 66% increase from 2023.

Brown’s warning arrives amid an increase in Livingston Police investigations into callers, sometimes impersonating law enforcement, attempting to convince residents to transfer large sums of money via a Bitcoin ATM machine at TJ’s Gas N’ Convenience store on East Park Street.

A Bitcoin ATM is a kiosk allowing patrons to purchase Bitcoin and other cryptocurrencies with cash or a debit card. Some Bitcoin ATMs offer bidirectional functionality, enabling both the purchase of Bitcoin and selling it for cash.

Scam callers impersonating law enforcement convinced a 54-year-old Park County man to transfer as much as $28,000 in cash via the same Bitcoin ATM machine on May 20.

“The phone callers identifying as law enforcement, said there was a warrant for the victim’s arrest,” Livingston Police Chief Wayne Hard said. “They explained they intercepted a package allegedly containing drugs, and told him to deposit $48,000, or he would be in trouble.”

The man deposited 70% of the funds — $100 bills at a time — before becoming frustrated and evidently telling the scammers they could come arrest him.

Online scammers convinced a Livingston man to deposit $24,900 into the same machine, according to a Livingston Police report from May 16.

“The reporting party had a pop-up display on Facebook saying they were locked out of their computer, and was given a support number to call,” Hard said. “They called the [scammer], and the [scammer] said someone was using the computer to buy child sexual abuse material.”

Crypto ATMs are starting to spring up around the state, according to Brown. His office identified at least 15 similar Bitcoin ATM machines across Montana.

“At this point,we are not really sure who is involved in putting these machines in,” he said.

Brown’s office partnered with the Federal Bureau of Investigation to post warning messages near Bitcoin ATMs, cautioning patrons on the machines pivotal and common role in scams.

“What we find is by the time we circle back, oftentimes those signs are removed,” Brown said. “We are warning people we have strong concerns … and to be very suspicious and wary about using these machines. People ask, ‘How is it possible these are even out there?’ We can put warnings on these machines, but we don’t have the authority to shut them down.”

Crypto what?Cryptocurrencies like Bitcoin are a type of digital currency in which a record of transactions is maintained and new units of currency are generated by the computational solution of mathematical problems, which operates independently of a central bank, unlike the U.S. dollar.

The Bitcoin currency network uses a form of encryption known as hash functions, for security and immutability. Bitcoin uses public key-based digital signatures to allow users to send it without needing to trust any central authority or intermediary.

The difference between a real ATM [and a Bitcoin ATM] is something comes out of real value,” said Brown. “With these crypto ATMs, we’re not really sure whether it’s legitimate or what the value is. The whole reason digital currency even started is because people wanted to engage in a form of commerce that was not transparent, beyond government regulation.”

While Bitcoin transactions are pseudonymous, meaning they are linked to a digital wallet address, as opposed to an official bank account connected to a verified identity, transactions are recorded, making them traceable. In theory, anyone can view the transaction history of a Bitcoin account, potentially linking it to an address and, with enough information, verify a scammer’s location and identity.

Behind the digital wallIt’s almost impossible to recover money stolen in a Bitcoin scam, according to Brown.

“We are able to trace where the money went, but from there it’s all over,” Brown said. “Most of these scam operations are overseas. Once you transfer the money into the scammers digital wallet, it’s gone. We can identify where it went, but we do not know who is ‘behind the wall,’ where they are located, if we have jurisdiction over them.”

InterventionBrown seeks more enforcement authority over Bitcoin ATMs.

“It’s going to take an act of legislature to give the Attorney General’s Office or our office some kind of authority to shut this down.” Brown said.

The Montana Legislature could provide his office with additional investigators with expertise to track down cryptocurrency fraudsters during the next legislative session in 2027, he said.

“We have investigators in the agency, but they are trained up in the more traditional forms of fraud, like insurance, traditional securities fraud,” he said. This is a whole new area we are encountering.”

Brown referenced recent conversations with the Petroleum Marketers Association, in which he encouraged proprietors not to allow the machines on the premises of their gas stations. He also had discussions with White House staffers in April.

“This is all very nascent,” he said. “I have watched how Bitcoin has been around since [2009], but this type of digital currency has just exploded within the past two-three years.”

Increased regulation could benefit legitimate companies who use, buy and sell cryptocurrency, according to Brown.

The State Auditor’s Office encourages those who believe they are victims of a cryptocurrency, insurance, any financial fraud or scam, to reach out to its Financial Abuse Specialist task force. The office encourages victims to report incidents within 48-72 hours. A restitution fund is available, authorized by Montana Legislature for compensating in-state fraud victims, with a maximum restitution of $50,000.

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