The Office of the Attorney General for the District of Columbia has sued cryptocurrency ATM operator Athena Bitcoin, claiming that the company knowingly charged undisclosed fees on deposits related to fraud and failed to establish adequate anti-fraud protections.
Attorney General Brian Schwalb of the District of Columbia alleged on Monday that 93% of deposits in the first five months of Athena's operation were "a direct result of fraud," criticizing the company's no-refund policy, which he stated prevents victims from recovering alleged undisclosed fees and fraud losses.
This comes amid a broader crackdown on cryptocurrency ATMs, with the FBI reporting nearly 11,000 fraud complaints from these kiosks in 2024, totaling over $246 million in losses. At least 13 states, including Arizona, Colorado, and Michigan, have implemented transaction limits to mitigate the potential impact of cryptocurrency ATM fraud.
Athena did not immediately respond to requests for comment.
In court documents, Schwalb's office accused Athena of charging consumers fees of up to 26% per transaction, which were "not clearly disclosed at any point in the process."
The office believes that Athena misled users by mentioning "transaction service margin" in its terms of service, where the term "fee" was never mentioned.
Athena is accused of engaging in deceptive and unfair trade practices, as well as violating laws designed to protect vulnerable adults and seniors from abuse, neglect, and financial exploitation.
According to the Attorney General's office, Athena allegedly "gained hundreds of thousands of dollars in undisclosed fees" from fraud victims during the first five months of its operation in Washington, D.C., many of whom were vulnerable individuals or seniors.
The documents state that the median age of victims was 71 years, with a median loss of $8,000 per transaction, claiming that one Washington, D.C. resident lost $98,000 in a scam assisted by an Athena kiosk.
Schwalb's office claims that Athena exhibited "ineffective oversight," creating "an unregulated pipeline for illegal international fraud transactions."
To protect themselves from the "predatory behavior" described by Schwalb, cryptocurrency ATM users should not send money to people they have not met, especially to those who contact them randomly.
Fraudsters often impersonate cryptocurrency tech support experts, claiming that the victim's funds may be at risk, or are traders promising to help them earn large profits with little or no risk.
Individuals encountering random requests should avoid responding and contact the institutions or individuals they claim to represent through official channels.
According to CoinATMRadar, there are currently 26,850 cryptocurrency ATMs in the United States. Bitcoin Depot holds the largest share of machines at 27.6%, followed by CoinFlip and Athena, with 13.6% and 13%, respectively.
As alleged by the Attorney General of the District of Columbia, the failure to disclose fees has historically been a widespread issue in the banking industry.
In April, the Federal Deposit Insurance Corporation (FDIC) ordered Discover Bank to return approximately $1.2 billion in overcharged fees to customers, while Wells Fargo was ordered to pay a $3.7 billion fine in December 2022 after it was found to have charged illegal fees and interest on mortgages.
Bank of America was also ordered to pay over $250 million in 2023 for charging "junk fees."
Related: Virginia voters head to the polls to participate in campaigns funded by cryptocurrency
Original article: “D.C. Attorney General Sues Athena Bitcoin for Charging Undisclosed Fees”
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