Diane Reynolds, a Maryland retiree, was taken aback when she received an unexpected online communication claiming that access to her computer had been blocked for security purposes. Alarmingly, a recorded voice message instructed her not to turn her computer on or off, prompting her to call what she believed was a legitimate tech support number. Instead, she found herself speaking with a scam artist who falsely informed her that hackers had compromised her bank account.
The scammer insisted that the only way for Reynolds to safeguard her funds was to convert them into bitcoin. Trusting the advice, she withdrew her entire bank account balance of $13,100 and proceeded to a bitcoin ATM at a nearby gas station to follow the instructions given by the con artist. The ATM, owned by Athena Bitcoin, is one of over 4,000 such terminals scattered across the U.S.
This incident is part of a broader trend highlighted by Washington, D.C. Attorney General Brian Schwalb, who pointed out a significant increase in cryptocurrency-related scams using bitcoin ATM kiosks, leading to the theft of millions from unsuspecting victims.
“Bitcoin ATMs are a tool that scammers and criminals are using to separate people from their hard-earned money,” Schwalb stated. He criticized Athena for allegedly neglecting to implement adequate anti-fraud measures while profiting from substantial transaction fees. Schwalb filed a lawsuit against the company in September, accusing it of charging hidden fees on deposits generated by scams and lacking effective fraud prevention systems.
In response to the allegations, Athena Bitcoin asserted that it “strongly disagrees” with the claims and intends to contest the lawsuit. The company emphasized its commitment to customer safety, citing various safeguards such as warnings, transaction limits, and multiple verification screens to deter coerced transactions.
Reynolds has also decided to take legal action against Athena Bitcoin. Her attorney, Vaught Stewart, contended that the company was not only allowing fraud to occur but actively profiting from it. Schwalb revealed that in Washington, D.C., Athena Bitcoin imposes fees of up to 26% per transaction, with an alarming 93% of all deposits processed through its ATMs reported to be linked to scams.
Determined to prevent others from falling victim to similar scams, Reynolds has taken on an advocacy role. “Now I’m an advocate for just telling people this is real,” she said. “Be aware.”
Financial scams associated with bitcoin ATMs are proliferating, according to the Federal Trade Commission, with the Better Business Bureau identifying crypto-related fraud as one of the most prevalent forms of financial crime. They also warn that fraudsters frequently target seniors, pointing out that unsolicited claims regarding computer hacks are a significant red flag for potential scams.
