DC Takes Legal Action Against Athena Bitcoin Over Crypto ATM Scam Deposits

Washington DC's legal hammer drops on crypto ATM operator Athena Bitcoin—alleging the company's machines became conduits for fraudulent transactions.

Regulatory Crackdown Intensifies

District attorneys claim Athena's ATM network processed millions in scam-linked deposits, with elderly investors particularly targeted by sophisticated fraud schemes. The lawsuit alleges inadequate anti-fraud protocols and know-your-customer checks—basically treating compliance like optional software updates.

Industry-Wide Implications

This case could set precedent for crypto ATM operators nationwide, potentially forcing tighter regulations across the 40,000+ machines operating in the US. Operators now face mounting pressure to implement real-time transaction monitoring and enhanced identity verification—or risk becoming the next courtroom spectacle.

Another day, another reminder that in crypto, the only thing more volatile than prices is regulatory scrutiny. Traditional finance might move slow, but at least their ATMs don't accidentally fund criminal enterprises—usually.

• Major Crypto ATM Operator Athena Bitcoin controls 13% of all crypto ATMs in the U.S., trying to make it one of the biggest players in the industry.
•  DC’s Attorney General declares Athena Bitcoin’s kiosks have now become the main gateway for international fraud, with 93% of deposits linked to scams.
•  The median age of the victims was around 71, with an average loss of nearly $8,000, and one resident lost $98,000 in a single scam.

Athena Bitcoin, the largest crypto ATM operator in the U.S., is now facing legal actions from the District of Columbia’s Attorney General, Brian Schwalb. The petition argues that Athena knowingly allowed scams through its kiosks and profits from hidden fees.

SENIORS SCAMMED THROUGH ATHENA ‘S CRYPTO ATMS

The lawsuit paints a dire scenario of how hackers gained access to Athena’s devices. Most of the victims are old, regularly contacted via unrequested means. The fraudsters are acting as tech support, bank representatives, or investment advisors. Once the people were convinced, they were directed to Athena kiosks to transfer funds and sometimes their life savings.

Schwalb’s office depicted Athena’s compliance efforts as “ineffective,” claiming the company for  enabling an “unchecked pipeline for illicit international fraud transactions.”  In between May and September 2024 alone, Athena reportedly collected hundreds of thousands of dollars from scam victims in DC.  Through hidden fees.

HIDDEN FEES AND MISLEADING TERMS

According to the data from the user named WashInformer, Athena uses one of the most damning claims, of vague language, like “Transaction Service Margin,” to disguise fees as high as 26%. These charges weren’t clearly revealed, leaving victims unaware of the money that they are losing with each transaction.

D.C. Attorney General Brian Schwalb sued Athena Bitcoin for exploiting elderly residents through hidden fees up to 26% and lack of fraud safeguards. Over 90% of deposits were linked to scams, with victims losing thousands.

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ATHENA BITCOIN: A SYSTEM BUILT FOR EXPLOITATION

DC’s lawsuit aligns with a growing national push to regulate crypto ATM fraud. Australia’s AUSTRAC has imposed with tighter cash limits and refused to restart licenses for non-compliant operators. Spokane, Washington, has banned crypto ATMs fully due to their involvement in scams.

Senator Dick Durbin introduced the Crypto ATM Fraud Prevention Act, which proposes daily transaction limits and mandatory conversations for higher amounts of transactions. If it passed, new users WOULD be limited to $2,000 per day and $10,000 over 14 days. Any transaction that is over $500 will require a detailed discussion with the operator who aims at preventing impulsive or coerced transfers.

LAWMAKERS AND REGULATORS PUSH BACK

Schwalb urged residents to stop sending crypto via ATMs to anyone they haven’t now personally. “If someone contacts you out of the blue and asks you to send money through a crypto ATM,” he warned, “it’s almost certainly a scam.”