Bitcoin ATMs, the now-ubiquitous machines in gas stations and smoke shops that convert physical cash to cryptocurrency, are in trouble.

Over the past few months, the Canadian government announced a proposal to ban the scam-prone machines while Tennessee, Minnesota and Indiana passed legislation to outlaw them. Just last week, the world’s largest operator of these ATMs, Bitcoin Depot, filed for bankruptcy, citing litigation and government action. Experts and authorities have for years warned about the machines’ heavy use by criminals, who rely on them as a convenient means to collect funds from scam victims.

But as the crackdown on crypto ATMs widens, one critical aspect of the scam ecosystem has escaped scrutiny: the…