GLADSTONE, Mo. (KCTV) – Gladstone businesses that operate cryptocurrency ATMs are now required to post warning signs asking customers, “Are you being scammed?” after the city council passed an ordinance targeting crypto kiosk fraud. The Clay County prosecuting attorney is working to expand the effort countywide.
$100,000 loss prompts local action
Gladstone Police Chief Fred Farris said scammers contact victims by phone, text, or pop-up ad, pressuring them to deposit cash into crypto ATMs by threatening utility shutoffs, warrants, or past-due bills.
“People get text messages, they get phone calls saying that they owe money, their utilities are going to get shut off,” Farris said.
One Gladstone resident lost nearly $100,000 through the scheme.
“We had a victim with a significant loss, almost $100,000, that they were convinced into depositing into one of these machines,” Farris said.
Countywide signs, zero charges
Clay County Prosecuting Attorney Zachary Thompson said his office has been posting warning signs countywide for six weeks. He said more than 150 crypto scam cases have been reported in Clay County — and none has resulted in charges.
“We didn’t get a single referral on those, which means we were unable to develop a single suspect on all 150 of those,” Thompson said.
Thompson said just before his interview with KCTV-5, he received word of another victim.
“Right before I came in to talk to you, I got off the phone with an officer from a city in Clay County where they had a case where someone put $40,000 into a machine,” Thompson said.
Signs described as ‘last line of defense’
Thompson said the warning signs have already stopped at least one transaction.
“He was putting money into the machine, and he saw our sign, and he did the right thing. He took a moment, he hung up on the scammer, called us,” Thompson said.
Permit requirement and penalties
The Gladstone ordinance requires businesses to obtain a permit before placing a crypto ATM on their property. The city has nine such machines. Farris said the permit requirement will help police track machine locations and ensure signs remain posted.
“This isn’t a money-making ordeal on our part by any means, but it’s also going to allow us to track exactly where these businesses are that have them so that we can better keep the signs up,” Farris said.
Enforcement begins next week. Businesses that do not comply face penalties starting with warnings, escalating to fines of up to $500 per day.
“If they see somebody that’s struggling with their machine and they’re hearing them talking to somebody, they need to be getting on to the person going, ‘Hang up the phone. You’re getting scammed,’” Farris said.
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