DC Lawsuit Targets Bitcoin ATMs as Fraud Enablers
The District of Columbia has taken a major step against Athena Bitcoin, a company that operates cryptocurrency ATMs across the city. According to a lawsuit filed by Attorney General Brian Schwalb, these machines have not only charged hidden and excessive fees but have also become a central tool for scammers to drain money from vulnerable residents.
What’s shocking is the data uncovered by investigators. In the first five months of Athena’s operations in D.C., a staggering 93% of deposits made through its Bitcoin Teller Machines were tied to scams. Many of those scams targeted older residents, with the median age of victims being 71. For these individuals, the losses weren’t small. The median amount lost per scam transaction was around $8,000, and in one heartbreaking case, a single victim lost $98,000 over just a few days through 19 separate transactions.
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The lawsuit alleges that Athena knew what was happening but chose to look the other way. Officials argue that instead of taking action to protect customers, the company profited by imposing hidden fees—sometimes as high as 26% per transaction. To put that into perspective, most mainstream crypto exchanges charge fees between 0.24% and 3%. Athena, on the other hand, slipped in charges nearly ten times higher without clearly disclosing them. Investigators even found that these fees were disguised under vague terms like “Transaction Service Margin,” never actually labeled as a “fee.”
Another troubling claim is that Athena enforced a strict “no refunds” policy. Even when victims realized they had been scammed and reported it directly to the company, refunds were denied. In some cases, victims were asked to sign documents that released Athena from future liability, essentially blaming the victims themselves for not recognizing the fraud.
Attorney General Schwalb described Athena’s machines as “a tool for criminals intent on exploiting elderly and vulnerable District residents.” He argued that by ignoring red flags and refusing to adjust its business practices, Athena had become an active enabler of fraud, not just a passive operator. The lawsuit accuses the company of violating consumer protection laws and laws meant to shield vulnerable adults from financial exploitation.
The broader significance of this case goes beyond just one company. It raises serious questions about the entire crypto ATM industry, which often promotes itself as a convenient gateway to digital finance. Instead, according to this lawsuit, those machines can operate like pipelines for international fraud, pushing seniors and less tech-savvy users into financial ruin.
With this lawsuit, D.C. is seeking restitution for victims, civil penalties, and strict requirements for Athena to change its practices. While Athena may fight back in court, the case is already sending a message: innovation in financial technology cannot come at the expense of consumer safety, and companies that profit while ignoring scams will be held accountable.
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