Federal Prosecutor Claims Bitcoin ATMs Facilitate Cryptocurrency Scams
Maryland retiree Diane Reynolds fell victim to an elaborate scam involving a bitcoin ATM. Reynolds received a call claiming her computer access was restricted for safety reasons. She was misled into contacting a supposed tech support number, ultimately connecting her with a fraudster.
The scammer informed Reynolds that hackers had accessed her bank account. To safeguard her funds, they instructed her to convert her money into bitcoin. Following this advice, Reynolds withdrew her entire bank account balance of $13,100 and went to a bitcoin ATM at a local gas station.
Bitcoin ATMs Facilitate Cryptocurrency Scams
The ATM she used was operated by Athena Bitcoin, a company with over 4,000 kiosks throughout the United States. Washington, D.C., Attorney General Brian Schwalb emphasized that such incidents reflect a growing trend in cryptocurrency scams linked to bitcoin ATMs. He stated that these machines are being exploited by criminals to extract money from unsuspecting victims.
Legal Action Against Athena Bitcoin
In September, Attorney General Schwalb filed a lawsuit against Athena Bitcoin. He accused the company of charging undisclosed fees on deposits likely linked to scams. Additionally, the lawsuit claimed that Athena failed to implement adequate anti-fraud measures.
- Bitcoin ATM transaction fees in Washington, D.C., can reach up to 26%.
- Approximately 93% of deposits through Athena Bitcoin’s ATMs are connected to fraudulent activities.
Athena Bitcoin publicly disagreed with the allegations and pledged to contest the lawsuit. The company claimed to have robust safety protocols, including transaction limits and multiple verification screens designed to prevent coerced transactions.
Personal Advocacy and Community Awareness
Reynolds has also initiated legal action against Athena Bitcoin, alleging that the company profits from scams while lacking proper protective measures. As an advocate for consumer awareness, she urges others to be vigilant against financial scams.
The Federal Trade Commission reports an increase in financial scams linked to bitcoin ATMs. The Better Business Bureau highlights these scams as particularly targeting senior citizens. Key warning signs include unsolicited calls claiming computer hacking or compromised security.
In summary, the rise of cryptocurrency scams, particularly those involving bitcoin ATMs, poses a significant threat to unsuspecting individuals, especially seniors. Authorities continue to investigate and take legal action against operators like Athena Bitcoin to safeguard consumers.
