Danvers Eyes Bitcoin ATM Ban Amid Repeated Scam Attempts

DANVERS, MA — Danvers Police Chief James Lovell told the Select Board that he is looking to work with town officials on a proposal to ban Bitcoin and other cryptocurrency ATMs amid recurring attempts to scam residents into making cash payments into those machines, under false pretenses.

Lovell cited one case in the past two weeks where a resident was inserting large amounts of cash into a machine at a gas station on Route 1 and credited the station attendant with alerting police to the potential scam.

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"Detectives responded and we were able to stop the individual from putting the money in," Lovell said. "The person on the other side of the phone was telling the person to not listen to the police, go outside, don't let them hear what we're talking about, do what I'm telling you to do.

"Luckily, we were able to stop that."

Lovell said that, compounding the problem, there have been recent court rulings that "have not been so favorable to law enforcement as far as recovering the funds."

"That's a concern," he said.

Lovell said that area communities, such as Gloucester, have begun to implement the bylaws banning the machines altogether and that he is working with Town Manager Jill Cahill — the former assistant town manager in that city — and town counsel on the bylaw language to present to the Select Board.

He said there were two cryptocurrency kiosks currently online in Danvers.

"(The store operator) did call us the other day when they saw someone," Lovell said. "So I do think they are understanding and trying to be a little more proactive as well by calling us and saying, 'Hey, this isn't looking right. Can you come down and talk to them?' Which we truly appreciate.

"That has been better. But I don't really see many legitimate purposes for these machines. So a bylaw could be very helpful."

(Scott Souza is a Patch field editor covering Beverly, Danvers, Marblehead, Peabody, Salem and Swampscott. He can be reached at Scott.Souza@Patch.com. X/Twitter: @Scott_Souza.)