Bitcoin Depot Fires Back: Texas Cops Seize $32K from Crypto ATM in Controversial Raid

Texas law enforcement just made a $32,000 withdrawal—no card required. Bitcoin Depot cries foul after a surprise raid on one of its crypto ATMs, sparking fresh debates about regulation and overreach.

When cops play bank robbers

The crypto kiosk operator slammed the seizure as 'heavy-handed policing,' arguing the machines operate within legal gray areas—like most profitable financial innovations before regulators catch up. Local authorities haven't disclosed what triggered the raid beyond 'suspicious activity.'

Déjà vu for crypto

This isn't the first time law enforcement has treated crypto ATMs like piggy banks. The incident echoes 2023's infamous 'Bitcoin Bandit' case, where Florida police confiscated machines outright. Bitcoin Depot's Texas skirmish suggests the war between crypto pioneers and badge-wielding skeptics is far from over.

Meanwhile, traditional banks lose more in overdraft fees before lunch.

Bitcoin Depot CLO sheds light on the repercussions of seeing cash from Bitcoin ATMs

According to the firm’s website, a bitcoin Depot kiosk costs around $14,000 under a profit-sharing program.

“You’ve got these rogue law enforcement officers thinking that they’re doing the right things by these consumers,” Ryan said. “What they’re actually doing is creating another victim, which is us, with the damage of our property and seizing of our funds.”

According to Buchanan, in most cases where something like this happens, the Bitcoin ATMs are always destroyed. He also added that if authorities are trying to seize funds from a Bitcoin Depot kiosk, the company will always unlock the machine. Ryan added that if the Bitcoin Depot’s property is damaged, the company is within their right to seek a refund from law enforcement, but the municipalities are always unable to foot the bill. “It’s not the norm that we WOULD get anything back,” he said.

Ryan added that Bitcoin Depot feels for the people being scammed through Bitcoin ATMs, but the company is entitled to keep the cash. He added that cops don’t understand the company’s business model or the fact that it is the customer’s Bitcoin that has already been stolen. “Once that transaction is completed, when the user inserts their cash and their crypto is funded into the wallet of their choosing, that ends our involvement in the transaction,” Ryan said.

Bitcoin ATM scams kick up in the United States

Scammers have been using Bitcoin ATMs and the fact that transactions carried out using the machines are irreversible to default people out of their money. These criminals have increased their activities in the United States in the last few months, impersonating the government, law enforcement, or banks.

In 2024, Americans lost at least $247 million to crypto scammers through crypto kiosks, up 31% from 2023, according to an FBI report. Once a scammer receives a victim’s Bitcoin in their wallet, it is difficult to recover the funds.

When a customer uses a Bitcoin ATM, they insert cash into the machine. According to Bitcoin Depot, it then sells an amount of Bitcoin directly to the user. To complete the transactions, the user needs to provide a wallet to receive the Bitcoin. In this case, the users always provide wallets belonging to the scammers, thereby sending the Bitcoin directly to the bad actors. There has also been confusion in court when authorities present warrant requests that show that the victims lost cash as part of the proceeds of crime and not the Bitcoin that scammers ran away with.

Ryan also stressed that law enforcement will seize funds from Bitcoin Depot in a year, noting that most of these actions don’t involve brute force. “You have another subset that just doesn’t go through the warrant process at all,” Ryan added. “They’ll call us and they’ll say, ‘We’re about to break into your machine.’”

While each state has their laws when it comes to issues like this, the Iowa Supreme Court ruled in two cases this year that Bitcoin Depot was entitled to cash paid by the victims for their Bitcoin transactions. That is mainly due to the terms and services of the company, where depositors are only allowed to present wallets that belong to them. While using the machine, Bitcoin Depot says it warns users that third-party addresses could result in a scam.

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