Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
The District of Columbia’s Attorney General, Brian Schwalb, has filed a lawsuit against crypto ATM operator Athena Bitcoin, alleging the company charged undisclosed fees and failed to implement adequate anti-fraud measures. The suit, announced Monday, claims Athena Bitcoin knowingly facilitated hundreds of thousands of dollars in scam-related transactions, many of which targeted vulnerable and elderly residents in Washington, D.C.
Allegations of Undisclosed Fees and Scam Facilitation
The Attorney General’s office claimed that Athena Bitcoin imposed transaction fees as high as 26% without clearly disclosing them to consumers. The lawsuit states that the company’s Terms of Service referred to a “Transaction Service Margin” rather than explicitly mentioning a “fee,” which the office argues misled users.
Schwalb’s office asserted that 93% of deposits at Athena’s D.C. machines during its first five months of operation, from May to September 2024, were “the direct result of scams.” Attorney General Schwalb stated, “Athena knows that its machines are being used primarily by scammers yet chooses to look the other way so that it can continue to pocket sizable hidden transaction fees.”
The lawsuit also criticized Athena’s no-refund policy, which, according to Schwalb, prevents victims from recovering both the alleged undisclosed fees and their scam losses.
Impact on Vulnerable Victims
The court filing detailed the significant impact on victims, with a median age of 71 and a median loss of $8,000 per transaction. The Attorney General’s office reported that one D.C. resident lost $98,000 from a scam facilitated at an Athena kiosk.
According to the office, Athena allegedly “pocketed hundreds of thousands of dollars in undisclosed fees” from these scam victims, many of whom were vulnerable or elderly.
Legal Charges and Oversight Concerns
Athena Bitcoin faces charges of engaging in deceptive and unfair trade practices. The lawsuit further alleges violations of laws designed to protect vulnerable adults and the elderly from abuse, neglect, and financial exploitation.
Schwalb’s office criticized Athena for what it called “ineffective oversight,” claiming this created an “unchecked pipeline for illicit international fraud transactions.” The filing concluded that Athena “has permitted and profited from transactions in which victims are coerced, misled, and manipulated into depositing their life savings into Athena’s machines under fraudulent pretenses.”
The lawsuit underscores growing concerns about the potential for cryptocurrency ATMs to be exploited by scammers. It seeks to hold Athena Bitcoin accountable for its alleged practices, aiming to protect consumers, particularly the elderly and vulnerable, from financial fraud and exploitation.
