Federal prosecutors have reported a surge in cryptocurrency scams involving Bitcoin ATMs across the United States, with Washington, D.C., Attorney General Brian Schwalb alleging that these machines have enabled the theft of millions of dollars from victims. Scammers primarily target elderly individuals by creating panic through false claims, such as relatives facing arrest or compromised bank accounts, and then direct victims to convert their money into Bitcoin at nearby ATMs.
In a detailed case, Maryland retiree Diane Reynolds lost her entire life savings of $13,100 after scammers contacted her online, claiming her computer was blocked for safety reasons. Under pressure, she withdrew her bank balance and was directed to a Bitcoin ATM operated by Athena Bitcoin, which runs over 4,000 terminals nationwide. Schwalb emphasized that this is not an isolated incident, noting a nationwide increase in such schemes in recent months.
Schwalb stated, "Bitcoin ATMs are a tool that scammers, that criminals, are using to separate people from their hard-earned money." He added that operators like Athena Bitcoin are aware of the criminal use but often fail to implement adequate anti-fraud measures, while profiting from transaction fees. In September, Schwalb filed a lawsuit against Athena, accusing the company of charging undisclosed fees on deposits linked to scams and neglecting fraud prevention.
Athena Bitcoin has contested the allegations, claiming it employs aggressive safety protocols, including prominent warnings, daily transaction limits, and five verification screens to prevent coerced transactions. The company plans to defend itself in court. Meanwhile, Reynolds has initiated her own legal action against Athena, with her attorney, Vaught Stewart, arguing that the company knowingly allowed fraud to occur and profited from it.
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