D.C. Sues Bitcoin ATM Firm Over Scams
By Greg Collier
District of Columbia Attorney General Brian Schwalb has filed a lawsuit against Athena Bitcoin, accusing the company of profiting from scams that overwhelmingly targeted older adults through its cryptocurrency ATMs. The case follows reports that one victim lost nearly $100,000 in less than a week by using these machines.
According to the Office of the Attorney General, scams conducted through Athena’s seven Bitcoin ATMs in Washington, D.C., accounted for 93 percent of all deposits. Victims lost a median of $8,000 per transaction, while Athena allegedly collected hidden fees as high as 26 percent, generating millions in revenue.
Investigators say the scams often began with phone calls from individuals posing as government or bank officials. Victims were pressured into depositing cash into Bitcoin ATMs after being told their funds were under threat or that they were assisting with a government investigation. Scammers typically remained on the phone throughout the process to maintain urgency and discourage victims from seeking outside advice.
Assistant Attorney General Jason Jones explained that cryptocurrency is attractive to fraudsters because transactions are irreversible and there is no intermediary to stop or reverse payments. Unlike traditional banks, which may be able to intervene, once money is deposited into a crypto wallet, it is immediately transferred to the scammer. The approach has similarities to gift card scams but is faster and more direct.
The lawsuit alleges that Athena failed to act on evidence of widespread fraud, allowed wallets tied to scams to remain active, and continued to profit from fraudulent transactions. The company is also accused of charging hidden fees far above typical cryptocurrency exchange rates and denying refunds even when fraud was reported. In some cases, customers were required to waive their rights to pursue future claims.
Nearly half of all deposits during Athena’s first five months of operating in the District were flagged as fraudulent, according to the lawsuit. Officials also reported that the median age of victims was 71, underscoring how older residents have been disproportionately affected. Many older adults may be less familiar with cryptocurrency and less likely to report financial exploitation, making them particularly vulnerable targets.
The District’s lawsuit accuses Athena of violating consumer protection and elder abuse laws. Schwalb’s office has stated that the goal of the case is to recover lost funds for victims and to put an end to practices that have enabled scammers to exploit residents through cryptocurrency ATMs.
The issue is not limited to Washington, D.C. Federal agencies, including the FBI and Federal Trade Commission, have issued repeated warnings about scammers using cryptocurrency ATMs to defraud victims nationwide. Consumer complaints of crypto-related fraud have surged in recent years, with billions of dollars lost across the country. Unlike traditional financial institutions, Bitcoin ATMs often operate under looser regulatory frameworks, with fewer safeguards in place to detect or block fraudulent activity. Some states have begun moving toward stricter oversight, including licensing requirements, caps on transaction amounts, and clearer consumer disclosures.
Authorities continue to emphasize that no government agency, financial institution, or legitimate business will ever ask someone to use a Bitcoin ATM to make a payment or transfer money. Any such request should be treated as an immediate red flag for fraud.
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