US Crypto ATM Operator Accused of Facilitating Fraud

Athena Bitcoin accused of profiting from fraud and hiding fees.

The operator of cryptocurrency ATMs, Athena Bitcoin, has been accused of profiting from fraud targeting the elderly and failing to disclose excessive fees. The lawsuit was filed by Washington, D.C. Attorney General Brian Schwalb.

According to the complaint, in the first five months of operation in the U.S. capital, 93% of the funds deposited into Athena’s ATMs were the “result of outright fraud.” In 2023, Americans reported losses of $189 million to the FBI related to ATM fraud.

The lawsuit also claims that customers in Washington were charged fees of up to 26%, with the markup “hidden in the price without consumer disclosure.”

In one instance, the exchange rate for bitcoin listed on the ATM was inflated by 25.4%—Athena sold the coin at $80,315, while its market price was $59,936. Thus, from $10,000 deposited into the ATM, the company transferred $7,463 to the recipient, retaining $2,537.

The prosecutor suggested that the fee charged increases proportionally with the size of the customer’s order.

In situations where victims deposit money into ATMs at the behest of fraudsters, “verbose warnings and complex legal disclaimers on Athena devices exacerbate confusion and pressure,” the lawsuit states.

Based on these facts, the company was accused of deceptive and unfair trade practices, as well as financial exploitation of vulnerable adults and the elderly.

A representative of Athena told Decrypt that they strongly disagree with the allegations and intend to defend themselves in court. According to them, the company employs strict security protocols, informing consumers about the risks and rules of using ATMs.

“Our ATMs are equipped with numerous protective measures: from prominent warnings and daily transaction limits to five separate verification screens designed to prevent coercive transactions and confirm that bitcoins are sent to a wallet belonging to [the customer],” the representative noted.

According to Coin ATM Radar, at the time of writing, there are 507 crypto ATMs operating in Washington state. Across the United States, 31,019 devices have been installed.

In July, New Zealand’s Deputy Minister of Justice, Nicole McKee, announced plans to completely ban the operation of cryptocurrency ATMs in the country to combat money laundering.