Inca Digital Finds 1/3 of Bitcoin ATMs are in HIDTAs

Bitcoin ATMs (BTMs) offer users an on/offramp to crypto with the benefit of physical accessibility and cash-based design. Despite their unique offerings, they have been linked to illicit activity, including unlicensed money transmission, drug trafficking, and laundering of criminal proceeds, by the U.S. Department of Justice and FinCEN^{1 2}. Additionally, BTMs often employ inconsistent KYC/AML standards and allow sub-threshold transactions with minimal identity checks.

Nearly ⅓ of BTMs are in HIDTAs

Inca Digital conducted a preliminary analysis of BTMs across the U.S. by cross-referencing their locations with High Intensity Drug Trafficking Areas (HIDTAs). We found that 32.24% of BTMs in the U.S. are situated within federally designated HIDTAs, raising concerns that these BTMs may be used to facilitate narcotics-related transactions.

While the overlap may reflect higher demand for BTMs in densely populated cities, the correlation underscores a potential risk that warrants continued monitoring. BTMs are increasingly concentrated in regions associated with drug trafficking, particularly along the Southwest border, South Florida, and the southeastern United States.

State by State Breakdown

Inca Digital analyzed several of the top states by total number of BTMs to assess their overlap with HIDTAs. Compared to the national average of 32.24% of BTMs in HIDTAs, California (85.26%), Illinois (71.19%), and Texas (64.22%) show significantly higher concentrations of BTMs located in HIDTA counties. In contrast, Florida (33.76%) and Pennsylvania (29.72%) align more closely with the national average.

The elevated concentrations of Bitcoin ATMs in California, Texas, and Illinois may be attributed to the presence of major urban centers such as Los Angeles, Houston, San Antonio, and Chicago. For example, in California, which has 2,144 BTMs, 1,300 are located in Los Angeles which is designated as a HIDTA. High population density in these areas naturally supports greater BTM deployment, however, these regions also coincide with established drug trafficking corridors, particularly along the Southwest border and key interstate routes, contributing to their heightened risk profile.

Conversely, Florida and Pennsylvania show a more distributed distribution of BTMs across both HIDTA and non-HIDTA regions. While cities such as Miami and Philadelphia serve as localized hotspots, the broader geographic spread may account for these states’ closer alignment with the national average, despite ongoing exposure to financial crime risks in key urban areas.

Future Analysis

Future analysis will aim to expand geographic coverage and enhance the precision of BTM risk assessments through ZIP code-level mapping. This initial study relied on city-level data to identify overlaps between BTM locations and HIDTAs. While not exhaustive, the findings offer an early indication of potential risk exposure in certain jurisdictions and provide a foundation for more granular geospatial analysis moving forward.

Future analysis may also examine additional high-risk areas beyond drug trafficking to develop a more comprehensive understanding of Bitcoin ATM-related vulnerabilities. These may include proximity to regions with elevated rates of cyber-enabled fraud and/or human trafficking corridors.

Get in Touch with Inca Digital

This work is part of Inca’s broader mission to help regulators and financial institutions identify crypto risk infrastructure and disrupt abuse while preserving lawful innovation.

If you are interested in crypto infrastructure risk mapping, data integration, or advanced monitoring, contact Inca Digital for access to our full intelligence suite.