DC Sues Crypto ATM Operator Over Widespread Scams and Hidden Fees

D.C. Attorney General Brian L. Schwalb has filed a lawsuit against Athena Bitcoin, Inc., accusing the company of financially exploiting District residents through its cryptocurrency ATMs. The lawsuit alleges that 93% of deposits made into Athena's Bitcoin Teller Machines (BTMs) were linked to scams, with many targeting seniors and vulnerable individuals.

According to the Office of the Attorney General for the District of Columbia (OAG), Athena knowingly profited from illegal, hidden fees while failing to implement adequate anti-fraud protections. Officials found that nearly half of all deposits at Athena's seven D.C. machines were flagged as fraudulent.

Key findings from the company's first five months of operations in D.C. include:

• 93% of all Athena BTM deposits were the direct result of scams.
• Nearly half of all deposits were reported to Athena as fraudulent.
• The victims' median age was 71, highlighting the targeting of elderly residents.
• The median amount lost per scam transaction was $8,000, with one victim losing a total of $98,000 in multiple transactions over several days.

Attorney General Schwalb stated, "Athena's bitcoin machines have become a tool for criminals intent on exploiting elderly and vulnerable District residents. Athena knows that its machines are being used primarily by scammers yet chooses to look the other way so that it can continue to pocket sizable hidden transaction fees."

The OAG also claims that Athena charges fees of up to 26% per transaction without clear disclosure, compared to typical fees of 0.24% to 3% on other platforms. In June 2024, Athena added a reference to a "Transaction Service Margin" in its Terms of Service, but the magnitude was never disclosed, and the word "fee" was not mentioned.

Additionally, Athena enforces a "no refunds" policy for scam victims and requires them to sign a release that absolves the company of liability, blaming victims for not heeding onscreen warnings.

The lawsuit alleges violations of the District's Consumer Protection Procedures Act and the Abuse, Neglect, and Financial Exploitation of Vulnerable Adults and the Elderly Act. Schwalb's office is seeking restitution for victims, civil penalties, and an order to change Athena's business practices.

Resources for District residents include information on detecting and reporting abuse, contacting Adult Protective Services, filing police reports, and reaching out to OAG's Civil Rights and Elder Justice Section.