The D.C. Attorney General’s office has taken legal action against a major Bitcoin ATM operator, and the details are pretty unsettling. Athena Bitcoin, Inc. is facing a lawsuit that claims the company repeatedly looked the other way while scammers targeted elderly residents through its machines. Attorney General Brian L. Schwalb announced the suit on Monday.
Allegations of Hidden Fees and Fraud
According to a pretty detailed, 30-page complaint, an astonishing 93% of the money going into Athena’s D.C. kiosks in its first five months there was linked to fraud. That’s a huge number. The lawsuit points to two main issues: deceptive trade practices and the financial exploitation of vulnerable adults.
One of the central claims is about the fees. While many crypto exchanges might charge around 3%, Athena’s machines in D.C. allegedly charged customers up to 26% without making that clear. The lawsuit says the fee was hidden within what was displayed as the “exchange rate.” So someone might think they’re getting a certain price per Bitcoin, but they’re actually paying a massive, undisclosed markup.
In one example, a victim was charged as if Bitcoin was trading at over $80,000 when the real price was around $60,000. The scammer got away with thousands, and Athena allegedly pocketed a hefty fee for the transaction.
The Human Cost of Complicated Machines
Bitcoin ATMs are often used in scams because the transactions can’t be reversed. The people targeted usually don’t know much about crypto. They’re just following instructions from someone on the phone who’s convincing them it’s an emergency.
The lawsuit argues that Athena’s own warnings on the machines don’t help. It says that elderly victims, standing nervous in a convenience store with a lot of cash, aren’t going to understand technical terms about generating a wallet. The rapid prompts and long legal disclaimers might actually make the confusion worse, not better.
And if someone realizes they’ve been scammed and asks for a refund? The suit claims Athena tells customers refunds aren’t available. If they do offer one, it’s allegedly capped and requires signing a confidential release that protects the company from future liability.
A Larger Tension
This case isn’t happening in a vacuum. There’s growing tension between Bitcoin ATM operators and law enforcement across the country. Police have sometimes even resorted to physically seizing machines to get funds back, with mixed results in court.
Some lawmakers have called for these companies to do more to stop illicit activity, especially scams targeting older adults. It’s a difficult balance between innovation and consumer protection, and right now, it seems the most vulnerable are paying the price.
Athena’s stock, which trades over-the-counter, actually went up after the news broke. It’s a small company, and its share price has fallen dramatically this year. We’ve reached out to them for comment and will update if we hear back.
