Federal Prosecutor Sues Bitcoin ATM Operator for Enabling Cryptocurrency Scams Targeting Seniors
Washington, D.C. – The District of Columbia’s Attorney General, Brian Schwalb, has filed a lawsuit against Athena Bitcoin, Inc., a major operator of cryptocurrency ATMs (BTMs), alleging that the company’s machines are being used extensively by scammers to defraud vulnerable residents, especially seniors, out of millions of dollars.
The lawsuit, filed in D.C. Superior Court, claims that 93% of deposits made into Athena Bitcoin’s ATMs over a five-month period originated from fraudulent schemes designed to exploit elderly residents. These scams typically involve foreign fraudsters who impersonate trusted entities such as banks, law enforcement, or tech companies to convince victims that their finances are at risk. The victims are instructed to withdraw cash and deposit it into Athena’s BTMs, converting their money into irreversible Bitcoin, effectively handing their savings directly to criminals.
“Athena’s bitcoin machines have become a tool for criminals intent on exploiting elderly and vulnerable District residents,” Attorney General Schwalb said. “Despite knowing these machines are primarily used by scammers, Athena has chosen to ignore this to continue profiting from hidden transaction fees, some as high as 26%, charged on each transaction.”
The complaint further alleges Athena knowingly allows large cash deposits into accounts that had previously been associated with scam activity, facilitating continued exploitation. Since cryptocurrency transactions via BTMs are irreversible, victims have virtually no recourse to recover their lost funds.
How Bitcoin ATMs Are Exploited in Scams
Cryptocurrency ATMs, appearing similar to traditional ATMs, allow users to convert cash into Bitcoin or other cryptocurrencies by depositing physical currency. Scammers utilize these machines as part of their fraud schemes by directing victims to send money via BTMs to wallets controlled by criminals, enabling near-instant, untraceable theft.
Victims often receive phone calls or messages from individuals impersonating officials, creating a sense of urgency or fear to manipulate them into depositing funds into these machines, believing they are securing or recovering their assets.
National Concern and Regulatory Actions
The problem is not isolated to Washington, D.C. Similar concerns and legal actions have emerged across the United States and internationally. For example, Maine denied a license to Bitcoin Depot over excessive consumer losses, mainly among seniors. Arizona recently enacted a Cryptocurrency Kiosk License Fraud Prevention law aimed at protecting seniors by enforcing transaction limits, mandatory warnings, and refund policies for fraud victims.
In 2024, the FBI reported a 99% increase in fraud complaints involving cryptocurrency ATMs, with a majority of victims being over 60 years old. Arizona alone documented losses exceeding $177 million linked to these scams.
Athena Bitcoin’s Response
Athena Bitcoin has disputed the allegations, stating that their business foundation is providing a safe and convenient customer experience. The company claims to have implemented safeguards such as prominent warnings, clear instructions, and consumer education to prevent fraud.
Despite these assertions, Attorney General Schwalb’s office is pressing forward, seeking to recover stolen funds for victims and to halt the predatory conduct enabling criminal exploitation through these machines.
Protecting Vulnerable Populations
Officials emphasize increased vigilance among seniors and the general public, cautioning to verify any requests for cryptocurrency transactions, especially when communicated by phone or unsolicited messages. Experts recommend skepticism around urgent demands for cryptocurrency payments and urge reporting suspicious activities promptly.
The case against Athena Bitcoin highlights the urgent need for stronger regulatory oversight of cryptocurrency ATM operators to protect consumers, particularly the elderly, from sophisticated financial crimes facilitated by emerging technologies.
Authorities continue to investigate and pursue actions against other companies and entities enabling similar fraudulent schemes nationwide.