Federal prosecutor says Bitcoin ATMs are fueling crypto scams

A federal prosecutor has drawn the public’s attention to the growing rate of crimes being carried out by scammers leveraging Bitcoin ATMs in different areas in the United States of America. According to Washington, D.C., Attorney General Brian Schwalb, issues like these have caused the theft of millions of dollars across the country.

Several counties in the United States have reported a growing rate of cryptocurrency scams linked to Bitcoin ATMs. According to several reports, the scammers have been targeting the elderly, preying on their gullibility and panic in such situations to extort money from them. Most times, they claim that their relatives are in jail or they have erred on the side of the law for failing to appear for jury duty. Subsequently, these scammers would ask them to pay fines in Bitcoin, pointing them to the nearest Bitcoin ATM to carry out the transactions.

Federal prosecutor faults Bitcoin ATMs for aiding crypto scams

In a recent case, the victim, Diane Reynolds, claims she was caught off guard when someone contacted the Maryland retiree online and said access to her computer had been blocked. According to Reynolds, the person claimed the access was blocked for safety reasons. “There was a voice message that was coming on with this that said, ‘Don’t turn your computer on, don’t turn your computer off,'” she told CBS News.

Reynolds said she was also instructed to call a phone number that the person offered, making her believe she was being connected to tech support. However, it turned out that she was connected to a scammer who claimed that hackers had obtained access to her bank accounts. The scam artist mentioned that the only way she could protect her funds was to convert them into Bitcoin. Reynolds, under pressure from the false alarm, did as she was told.

After withdrawing her entire bank balance, which was about $13,100, Reynolds said the scammers directed her to go to a Bitcoin ATM at a nearby gas station. The ATM was operated by Athena Bitcoin, which has more than 4,000 Bitcoin ATM terminals across several states in the United States of America. According to Schwalb, this is not a standalone case, as there are others across the United States with such experiences or one related to the one that happened to Reynolds.

Athena Bitcoin sued for profiting from crypto scams

Schwalb said, “Bitcoin ATMs are a tool that scammers, that criminals, are using to separate people, including D.C. residents, from their hard-earned money.” “Athena, as a bitcoin operator, knows that its kiosks are being used by this element, and yet [has] failed to put proper anti-fraud prevention systems in place to keep it from happening,” he added. He noted that what makes it even harder to process is that the operators of these Bitcoin ATMs are profiting from whatever has been happening because they charge substantial fees on transactions.

In September, Schwalb filed a lawsuit against Athena, alleging that it charges “undisclosed fees on deposits that it knows are often the result of scams, and for failing to implement adequate anti-fraud measures.” However, in its statement, Athena Bitcoin claims that it strongly disagrees with the allegations and it is prepared to contest the charges in court.

“We employ aggressive safety protocols to protect the financial interests of our customers. … Our kiosks employ multiple safeguards, from prominent warnings and daily transaction limits to five separate verification screens designed to stop coerced transactions,” the company said. Meanwhile, Reynolds is also initiating legal actions against Athena Bitcoin. According to her attorney, Vaught Stewart, Athena stood by and allowed the fraud to happen and still profited from it.

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