What Does the 16th Century Spanish Prisoner Scam Have in Common with Bitcoin?

The "Spanish Prisoner" is one of history's oldest scams, dating back to the 16th century. The scam involves a fraudster tricking a victim into sending money upfront to free a supposedly imprisoned, wealthy individual, with the promise of a massive financial reward in return. Sound familiar? While it originated in the 16th century, the scheme saw massive popularity in 19th-century Europe and America as widespread mail systems emerged. Now does it sound familiar? Switch out “Spanish Prisoner” for “Relative in Jail” or “New Romantic Interest in Financial Trouble” and it should sound even more familiar. These are the building blocks of 2026 fraud.

There are regulatory agencies at all levels that seem to think the emergence of cryptocurrency created this new thing called “a scam”. And by eliminating access to cryptocurrency through the use of ATMs and/or kiosks, they will also be eliminating the scam. The mere fact that these scams have survived 500 years of evolution should give them pause to consider a different approach. To begin with, other potential payment methods for the criminals include cash, wire transfers, checks, MoneyGram, gift cards, gold, silver, real estate, bonds, and so-on. The truth of the matter is that eliminating consumer access to crypto would simply drive that fraud to other channels – it would not disappear.

Regulating access to cryptocurrency is certainly a complex matter. I am encouraged, though, by the efforts of some states to take a more realistic and pragmatic approach to reducing fraud and still allow for consumer access to and use of cryptocurrency. Many, if not most of the elderly who are targeted, for example, have never performed a crypto transaction. And may not be aware that those transactions are completely irreversible. Or be willing to listen to reason from anyone else – under those circumstances. Limiting the value of that first transaction for new users makes a lot of sense. Hopefully, at least some making that first smaller transaction will give reasoned thought to the circumstances and not throw away their life savings. 

Banning crypto kiosks/ATMs altogether serves no purpose, except to:

• deprive 99+% of crypto user’s convenient access to cryptocurrency
• force some consumers to less regulated and more dangerous payment systems
• raise concerns about the future possibility of bans on another financial product/service

Best regards to all.

David