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DC Sues Crypto ATM Firm Athena Bitcoin Over Scam-Linked Deposits

The District of Columbia’s Attorney General is taking authorized motion towards Athena Bitcoin, alleging the crypto ATM operator facilitated fraud and profited from undisclosed charges tied to scam-related transactions.

Key Takeaways:

  • DC Attorney General sues Athena Bitcoin for enabling scams and hiding charges as high as 26%.
  • 93% of Athena’s DC ATM deposits have been linked to fraud, focusing on largely aged victims.
  • The agency is accused of misleading practices and failing to stop exploitation by its crypto kiosks.

In a lawsuit filed Monday, DC Attorney General Brian Schwalb claimed that 93% of Athena’s deposits throughout its first 5 months of operation in DC have been the direct results of scams.

Athena Bitcoin Charged Fees of Up to 26%

The firm allegedly charged victims undisclosed charges of as much as 26% per transaction, whereas failing to implement correct safeguards towards fraud.

“Athena is aware of that its machines are getting used primarily by scammers but chooses to look the opposite method in order that it may possibly proceed to pocket sizable hidden transaction charges,” Schwalb stated in a press release.

The lawsuit comes amid a rising nationwide crackdown on crypto ATM fraud. The FBI logged practically 11,000 complaints in 2024, amounting to over $246 million in losses.

Multiple states, together with Arizona, Colorado, and Michigan, have enacted transaction caps in an try and curb abuse.

Schwalb’s submitting alleges Athena misled clients by referring to a “Transaction Service Margin” in its Terms of Service, with out clearly disclosing it was a payment.

The agency is being charged with misleading and unfair commerce practices, and violating legal guidelines designed to guard aged and susceptible adults from monetary exploitation.

Between May and September 2024, Athena allegedly collected tons of of 1000’s of {dollars} in hidden charges from rip-off victims in DC.

The median sufferer age was 71, and the typical loss per transaction was $8,000. One aged resident reportedly misplaced $98,000 by a single rip-off carried out by way of an Athena kiosk.

The legal professional common’s workplace described Athena’s compliance measures as “ineffective,” accusing the agency of enabling an “unchecked pipeline for illicit worldwide fraud transactions.”

Schwalb urged the general public to keep away from sending funds by way of crypto ATMs to individuals they haven’t met, notably these reached by unsolicited messages.

Scammers usually pose as tech assist, funding advisors, or financial institution representatives to strain victims into transferring funds.

Athena at the moment operates 13% of crypto ATMs within the U.S., making it one of many trade’s largest gamers, behind Bitcoin Depot and CoinFlip, in accordance with CoinATMRadar.

More Countries Clamp Down on Crypto ATMs

In Australia, AUSTRAC lately introduced stricter rules for crypto ATM operators, together with tighter money limits and monitoring.

The regulator refused to renew the registration of a local crypto ATM operator, Harro’s Empires. The company positioned working situations, together with transaction limits, on them.

In the US, Spokane, Washington, has banned crypto ATMs entirely, citing their use in scams focusing on susceptible residents.

Lawmakers within the US Senate are additionally making an attempt to tighten legal guidelines on a state and native stage, with one try led by Illinois Senator Dick Durbin.

He has introduced the Crypto ATM Fraud Prevention Act, which might usher in legislative measures designed to guard the general public — whereas making an attempt to restrict inconvenience for law-abiding customers.

New customers can be prevented from spending greater than $2,000 a day at one among these machines, rising to $10,000 in a 14-day interval.

Operators would additionally have to have an in depth dialog every time a brand new person is making an attempt to finish a transaction with a price of over $500.

The put up DC Sues Crypto ATM Firm Athena Bitcoin Over Scam-Linked Deposits appeared first on Cryptonews.

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