Des Moines' crypto crisis: Police tally nearly $500K lost
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Aïda Amer/Axios
Cryptocurrency scams cost Des Moines residents nearly $500,000 last year, according to new crime data that, for the first time, reports the losses in cases investigated by the city's police department.
Why it matters: Recovering money lost to crypto scams is notoriously difficult, but DSM police are hopeful that recent state and federal actions will help prevent the thefts.
Catch up quick: As virtual currencies have been more widely accepted over the years, law enforcement has struggled to combat crimes that are tied to billions of dollars in crypto exchanges.
Driving the news: DSM police investigated 18 cryptocurrency scams in 2024, according to its September data report.
- The average loss was just under $27,000.
Zoom in: Iowans lost over $20 million in crypto transactions over three years, according to a state investigation released this year that led to a lawsuit against ATM operators.
- The scams usually involve a trick to get people to turn cash into digital currencies and then send it to someone else via ATM.
- Scammers frequently pose as romantic partners or law enforcement and often target senior citizens, according to the Iowa Attorney General's office.
What they're saying: In addition to scams, criminals are also increasingly using cryptocurrency to conceal large amounts of money, often making it "very difficult, if not impossible to seize" without knowing a complex user password or code, police chief Michael McTaggart told the City Council.
State of play: A new Iowa law limiting crypto ATM transactions to $1,000 a day is already helping to reduce the scams, Sgt. Paul Parizek tells Axios.
- DSM police are also now looking at better ways to track crypto criminals following recent federal legislation that better enables law enforcement to freeze or seize assets tied to crypto's illegal use, he said.
The big picture: Some other states have also taken action, including Illinois, where lawmakers passed a law requiring machine operators to include details, such as blockchain addresses where funds are sent, to assist law enforcement in tracking them.
What we're watching: Whether the state's lawsuit against major crypto operators results in money being returned to Iowans.
- It seeks at least $40,000 for each transaction that allegedly violates state consumer protection laws.