Washington D.C. Attorney General Sues Athena Bitcoin for Financial Exploitation
Washington D.C. Attorney General Brian L. Schwalb has filed a lawsuit against bitcoin ATM operator Athena Bitcoin Inc. for allegedly financially exploiting residents through its ATMs. The lawsuit claims that 93% of all deposits made to Athena Bitcoin ATMs were fraudulent in the past five months, and that the company failed to disclose excessive fees. The lawsuit alleges that Athena Bitcoin's practices violated the Consumer Protection Procedures Act and the Abuse, Neglect, and Financial Exploitation of Vulnerable Adults and the Elderly Act.
Key Takeaways:
- The lawsuit claims that 93% of all deposits made to Athena Bitcoin ATMs were fraudulent in the past five months.
- Athena Bitcoin allegedly failed to disclose excessive fees to its customers, and instead imposed a no refunds policy.
- The median age of victims was 71, with a median transaction loss of $8,000.
- Athena Bitcoin does not clearly disclose the fee amount on its ATMs or website, despite having a 700+ word Terms of Service.
- The lawsuit is asking for the court to order Athena Bitcoin to disclose transaction fees, implement fraud prevention measures, remove its no refund and refund cap policies, and pay damages and civil penalties of up to $15,000 for each violation.
- Bitcoin ATMs have been under significant pressure due to the rise of scams, with the recent signing of two bills regulating cryptocurrency and bitcoin ATMs in Illinois.
Statistics:
- 93% of all deposits made to Athena Bitcoin ATMs were fraudulent in the past five months.
- Median age of victims: 71.
- Median transaction loss: $8,000.
- Up to 26% of scam transactions were retained by Athena Bitcoin as a fee.
- $10,000 per violation of the Financial Exploitation Act.
- $5,000 per violation of the Consumer Protection Procedure Act.
Sources:
- [Source unavailable]
- Hoffman, D. (2023, February 20). Illinois governor signs laws regulating cryptocurrency and Bitcoin ATMs. The Block.