Attorney General Brian L. Schwalb has initiated legal action against Athena Bitcoin, Inc., one of the major operators of Bitcoin Automated Teller Machines (BTMs) in the United States. The lawsuit alleges that Athena has been imposing undisclosed fees on deposits, often made by scam victims, and failing to establish adequate anti-fraud measures. Victims who attempt to seek refunds for these transactions are met with a stringent “no refunds” policy that also denies the return of the considerable hidden fees collected by the company.
An investigation conducted by the Office of the Attorney General (OAG) revealed that Athena BTMs have become attractive targets for criminals due to inadequate oversight, enabling rampant international fraud. Data from Athena’s operations within the District indicates that a staggering 93% of all deposits made into its BTMs were directly linked to scams. Nearly half of these deposits were flagged by victims as fraudulent, with affected individuals often being elderly. The median age of victims was reported as 71, and the average financial loss per scam transaction reached $8,000, with one individual losing an alarming $98,000 through nineteen transactions within a matter of days.
Attorney General Schwalb emphasized the need for immediate action, stating, “Athena’s bitcoin machines have become a tool for criminals intent on exploiting elderly and vulnerable District residents.” He accused the company of knowingly allowing its machines to facilitate scams while profiting from hidden transaction fees.
Athena operates seven BTMs in the District, enabling users to purchase cryptocurrencies like Bitcoin using cash, which is subsequently deposited into a digital wallet. In many fraudulent instances, however, unsuspecting users send substantial sums directly to scammers rather than maintaining control over their digital wallets.
The lawsuit outlines several violations by Athena, including:
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Facilitating Financial Scams: The company allegedly recognizes that its protective measures are inadequate. Athena’s internal records show that 48% of all deposits resulted in victims reporting scams directly to the company.
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Profiting from Hidden Fees: Athena reportedly charges fees as high as 26% per transaction, significantly more than typical fees associated with other cryptocurrency platforms, which typically range from 0.24% to 3%. In June 2024, Athena added a confusing reference to a “Transaction Service Margin” in its Terms of Service, which does not disclose the magnitude of the fees involved.
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Refusing Refunds to Victims: The company’s refund policy reportedly denies or arbitrarily limits reimbursements to scam victims. Furthermore, victims are often required to sign a release that absolves Athena of future liability while the company shifts blame back to the victims for not heeding onscreen warnings on the BTMs.
The OAG seeks to compel Athena to align its operations with District laws, provide restitution for victims, and face penalties for its actions.
In light of the potential impact of elder financial abuse, resources are available for residents to report, detect, and prevent such exploitation. Victims or anyone who suspects exploitation of a senior or vulnerable adult are encouraged to seek immediate assistance.
For those wishing to report unfair business practices, scams, or fraud, the OAG has provided contact information and resources on its website, dedicated to consumer protection efforts in the District.
