Washington, D.C. has become the focal point of a major legal battle as Attorney General Brian L. Schwalb filed a lawsuit against Athena Bitcoin, Inc., alleging that the company has been neglecting its responsibility to protect vulnerable elderly residents from scams. The firm operates a significant number of Bitcoin ATMs, with 4,100 locations across five countries, and now faces two serious counts for violating the Consumer Protection Procedures Act due to what has been described as deceptive and unfair trade practices.
The lawsuit highlights concerns that customers, particularly seniors, have fallen victim to scams perpetrated through these Bitcoin ATMs. In just the initial five months of operation in Washington, D.C., an astonishing 93% of funds deposited into Athena’s kiosks were reported to be the result of direct fraud. The FBI has also revealed a staggering $189 million in losses linked to scams involving Bitcoin ATMs in 2023 alone, underscoring the urgency of the issue.
In addition to the scams, Schwalb’s lawsuit alleges that the firm is charging exorbitant fees that can reach as high as 26%. This is notably higher than the standard fees typically imposed by crypto exchanges, which can be around 3%. The attorney general claims that Athena has not been transparent with consumers regarding these costs, alleging that the fees are concealed within what Athena misleadingly advertises as the ‘exchange rate.’ Many customers are reportedly left unaware of the high markups they incur, especially since receipts from the ATMs lack itemized fee information.
One particular transaction underscored the alleged malfeasance: a customer was charged as if Bitcoin were trading at $80,300, while the actual market price was around $60,000. This discrepancy resulted in a substantial financial loss for the victim and unwarranted fees for Athena. Reportedly, if customers inquired about refunds after being charged these inflated rates, they were met with policies that limited their refunds to $7,500—or none at all—while requiring them to waive any future legal claims against the company.
The lawsuit also places Athena’s practices within a broader context, highlighting a growing concern over the role of Bitcoin ATMs in facilitating scams. Law enforcement agencies have become increasingly vigilant, grappling with challenges when it comes to recovering stolen funds, often facing legal hurdles that prevent them from retrieving money from these machines.
Critics point to the convoluted language and warnings displayed on Athena’s kiosks, arguing that they serve to confuse customers further, particularly vulnerable populations like the elderly who may already be under pressure from scammers. Schwalb stressed that these rapid prompts and complicated legal disclaimers do nothing to alleviate the stress and confusion etched upon unsuspecting victims.
Calls for reform have extended beyond the District, with legislative efforts urged by figures such as U.S. Senator Dick Durbin advocating for stricter oversight of Bitcoin ATM operators to combat illicit activities targeting seniors. As discussions on how to prevent exploitation continue, the lawsuit against Athena Bitcoin has put a spotlight on the need for greater consumer protections in the ever-evolving cryptocurrency landscape.
