When the value of Bitcoin soared last year, millions of people who had never heard of cryptocurrency suddenly became eager to own it. But the currency's digital only marketplace isolated it from a whole swath of interested consumers.
So start-ups set about trying to bridge the gap between the digital and physical world.
Brandon Mintz chose a familiar contraption: The ATM
Mintz is the CEO of Bitcoin Depot, an Atlanta-based company that distributes Bitcoin ATMs across the country. Machines like his are among the only places where you can use paper money to purchase digital currency. All you have to do is enter your name, phone number, and scan a photo ID if your purchase is more than $2,000.
Yet turning cash into crypto hasn’t gone mainstream. And the same questions that have dogged Bitcoin online are being raised in the physical realm as well. Namely, who is using the currency and why?
In the U.S., there is almost no federal or state monitoring of Bitcoin ATM transactions — which makes it hard to get a clear picture of who is feeding cash into these machines and for what purposes. So far, New York is the only state that requires Bitcoin ATM operators to have a license.
Companies like Bitcoin Depot are tasked with self-reporting suspicious activity to the Financial Crimes Enforcement Network, a bureau within the U.S. Treasury Department created to, “determine emerging trends and methods in money laundering and other financial crimes.” But they do so without independent oversight.
In a statement to VICE News, Bitcoin Depot said it “has outstanding compliance policies and strives to go above and beyond all know your customer (KYC) and monitoring requirements at its ATMs.”
There are other obstacles standing in the way of Bitcoin becoming a regular option in your local gas station: the cost. Bitcoin ATMs themselves cost as much as $10,000, compared to a few thousand for a regular ATM. And while some let you sell Bitcoin and take cash out, most don’t.
Still, Mintz estimates that his customers put tens of millions of dollars into his machines every year.
This segment originally aired May 29, 2018 on VICE News Tonight on HBO