Athena Bitcoin, one of the largest operators of Bitcoin ATMs in the United States, is facing a lawsuit in Washington, D.C., for allegedly defrauding senior citizens.
In the lawsuit, District Attorney General Brian L. Schwalb accuses the firm of exploiting seniors and vulnerable residents through undisclosed fees and lax fraud controls that turned its machines into tools for scammers.
Fees hidden in the “exchange rate”
At the center of the case is the allegation that Athena charged customers as much as 26% on cash-to-Bitcoin transactions.
Instead of itemizing the charges, the company is accused of embedding the markup into the displayed “exchange rate.” According to the complaint, receipts failed to show the breakdown, and Athena’s website offered no clarity either.
In one striking example cited by prosecutors, a victim was charged as if Bitcoin (BTC) was trading at $80,300 when the market price hovered around $60,000. A scammer walked away with thousands of dollars, while Athena allegedly pocketed $2,500 in hidden fees.
Regulators argue that such practices left consumers, many of them elderly, without any clear idea of how much they were paying.
First five months of operations in DC linked to fraud?
The lawsuit leans heavily on data from Athena’s own systems.
During the first five months of operations in the District, prosecutors say that 93% of deposits at Athena’s ATMs were linked to fraud. Nearly half of those transactions were flagged by customers themselves as scams.
The victims were often elderly residents. Investigators found that the median age of those affected was 71, with a median loss of $8,000 per transaction.
In one case, a single victim lost $98,000 across 19 separate transactions over just a few days. Attorney General Schwalb said such numbers demonstrate that Athena’s kiosks have become “a tool for criminals intent on exploiting elderly and vulnerable District residents.”
Refunds denied or capped
Adding to the controversy is Athena’s refund policy. The company is accused of enforcing a strict “no refunds” rule, even when customers quickly discovered they had been tricked.
On the rare occasions when refunds were offered, they were reportedly capped at $7,500. Victims also had to sign a confidential release that waived future legal claims against the company.
Critics say this approach allowed Athena to retain significant profits from hidden fees while distancing itself from the losses suffered by defrauded consumers. The complaint accuses the company of blaming victims for not paying enough attention to on-screen warnings, despite evidence that scammers often coached them through the process over the phone.
Bitcoin ATM scams in the US
Brian L. Schwalb’s lawsuit highlights a growing rift between Bitcoin ATM operators and regulators.
Other companies, such as Bitcoin Depot, have previously faced similar scrutiny, though some courts sided with operators who prominently displayed scam warnings.
Schwalb argues that Athena’s warnings were ineffective, confusing, and failed to stop scammers from preying on seniors who had little understanding of cryptocurrency.
In 2023, the FBI reported that Americans lost $189 million in scams linked to Bitcoin ATMs, underscoring the scale of the issue.
Lawmakers have also begun weighing in. Senator Dick Durbin has called on operators to curb abuses against the elderly, while some conservative politicians have suggested placing ATMs in federal buildings to encourage crypto literacy.