DC attorney general sues Athena Bitcoin over alleged hidden fees

“Athena knows that its machines are being utilized chiefly by scammers yet chooses to look the different mode truthful that it tin proceed to pouch sizable hidden transaction fees.”

It comes amid a broader crackdown connected crypto ATMs, with the FBI reporting astir 11,000 complaints of fraud came from the kiosks successful 2024, totaling implicit $246 cardinal successful losses. At slightest 13 states, including Arizona, Colorado and Michigan, person implemented transaction limits to trim the imaginable interaction of crypto ATM fraud.

Athena did not instantly respond to a petition for comment.

Athena allegedly profits six figures from undisclosed fees

In the tribunal filing, Schwalb’s bureau alleged that Athena was charging user fees of up to 26% per transaction without “clearly disclosing them astatine immoderate constituent successful the process.” 

The bureau argued that Athena misled users by referring to a “Transaction Service Margin” successful its Terms of Service, wherever “fee” was ne'er mentioned. 

Athena was charged with engaging successful deceptive and unfair commercialized practices, arsenic good arsenic violating laws aimed astatine protecting susceptible adults and the elderly from abuse, neglect, and fiscal exploitation. 

Source: Brian Schwalb

According to the lawyer general’s office, Athena allegedly “pocketed hundreds of thousands of dollars successful undisclosed fees” from scam victims, galore of whom were susceptible oregon elderly, successful its archetypal 5 months of operating successful DC betwixt May and September 2024. 

The median property of victims was 71, portion the median nonaccomplishment per transaction was $8,000, according to the filing, which claimed 1 DC nonmigratory mislaid $98,000 from a scam facilitated astatine an Athena kiosk.

Schwalb’s bureau claimed Athena had “ineffective oversight,” which it said created an “unchecked pipeline for illicit planetary fraud transactions.”

“Athena has permitted and profited from transactions successful which victims are coerced, misled, and manipulated into depositing their beingness savings into Athena’s machines nether fraudulent pretenses.”

Steps to debar being scammed astatine crypto ATMs

To support oneself from what Schwalb described arsenic “predatory conduct,” crypto ATM users shouldn’t nonstop funds to idiosyncratic they haven’t met, particularly if it is to idiosyncratic they’ve randomly been contacted by.

Related: Tasmanian constabulary find apical 15 crypto ATM users are scam victims

Scammers typically contiguous themselves arsenic a crypto tech enactment specialist, claiming the victim’s funds whitethorn beryllium astatine risk, oregon a trader who promises to assistance them marque outsized profits astatine small to nary risk.

Those met with random requests should refrain from responding to them and interaction the instauration oregon idiosyncratic they assertion to correspond done authoritative channels. 

There are presently 26,850 crypto ATMs successful the US, according to CoinATMRadar. Bitcoin Depot owns the largest stock of machines astatine 27.6%, followed by CoinFlip and Athena astatine 13.6% and 13%, respectively.

Share of crypto ATMs by relation successful the US. Source: CoinATMRadar

Banking manufacture rife with undisclosed interest scandals

Failing to disclose fees, arsenic the DC lawyer wide alleges, has historically been a prolific issue successful the banking industry.

The Federal Deposit Insurance Corporation ordered Discover Bank to instrumentality astir $1.2 cardinal successful fees it overcharged to customers successful April, portion Wells Fargo was ordered successful December 2022 to wage $3.7 cardinal worthy of fines aft it was recovered imposing amerciable fees and involvement charges connected mortgages.

Bank of America was besides ordered to wage implicit $250 cardinal for charging “junk fees” successful 2023. 

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