Crypto ATM under scrutiny in Washington: “hidden fees” and 93% of deposits linked to fraud — what the lawsuit reveals

A civil action from the District of Columbia brings the spotlight back on the security of crypto ATMs: the operator Athena Bitcoin is accused of applying non-transparent fees and processing transactions linked to scams, up to 93% of deposits, according to the statement recently released by the District of Columbia Attorney General (action filed on September 8, 2025) and also reported in the data collected by the FBI Internet Crime Complaint Center IC3. In this context, the case touches on three sensitive issues: transparency, user protection, and anti-fraud controls.

According to the data collected by the Prosecutor’s Office and the on-site checks conducted by local investigators, the majority of the deposits examined are linked to scams; many victims have a median age of 71, as reported in the complaints. Industry analysts note that the combination of synthetic machine interfaces and non-explicit pricing practices increases the risk of error and facilitates the actions of fraudsters.

The key accusations against Athena: fees up to 26% and “no refund” policy

The lawsuit, initiated by Attorney General Brian Schwalb, claims that Athena would have collected high margins on deposits later revealed to be fraudulent, reaching – according to the prosecutor’s office – up to 26% per transaction. Additionally, the adoption of a “no refund” policy is contested, considered particularly detrimental to victims, especially elderly or more vulnerable users. That said, the crux remains the combination of opaque costs and verifications deemed insufficient.

Key Figures, Impact, and Context

• Share of deposits linked to fraud: approximately 93% of the transactions examined, as highlighted by the statement from the District of Columbia Attorney General.
• Median loss per transaction: approximately $8,000, with individual cases reaching up to around $98,000.
• National context: according to reports and notifications collected by the FBI Internet Crime Complaint Center (IC3), thousands of complaints with significant losses have been documented in the crypto kiosk segment [see IC3 report for aggregated data].
• Spread of crypto ATMs: over 26,850 active terminals in the USA, according to CoinATMRadar (accessed on September 9, 2025).
• Period analyzed: the initial months of Athena’s activity in the District, dating back to 2023, as indicated in the accusation; the legal action was filed on September 8, 2025.

How the fees would have been disguised: the term “Transaction Service Margin”

According to the complaint, Athena used the expression “Transaction Service Margin” in the Terms of Service without specifying the term “fee” or “commission.” For users – often dealing with synthetic interfaces and limited time – this would have made the real cost of the transaction less apparent, complicating the understanding of the final price. The changes to the Terms of Service mentioned in the complaint date back to June 2024, according to local reports.

Why crypto ATMs are a target: from fake alerts to crypto transfers

The most common schemes start with false alarms (for example, “account breached” or “relative in trouble”) or the promise of easy profits. The orchestrator of the scam accompanies the victim to the counter, guides them step-by-step, and induces them to convert cash into cryptocurrency. The accusation claims that Athena continued to process these flows without adequate checks, effectively channeling funds to criminal networks, often of a transnational nature. It should be noted that the speed of execution and the irreversibility of the transaction increase the attractiveness of these channels for fraudsters.

What the authorities are asking for: more clarity and operational brakes

The complaint challenges practices deemed deceptive and calls for structural remedies for consumer protection. Among the measures advocated are total transparency on fees on every transaction screen, limits on amounts and frequency – to discourage rapid and repeated disbursements – and interruption and reporting procedures in the presence of signs of coercion. Indeed, the goal is to make it more difficult for fraudsters to exploit process and information weaknesses.

Where Limits Have Already Been Triggered: The Clampdown by at Least 13 US States

To contain losses, at least thirteen states – including Arizona, Colorado, and Michigan – have introduced transaction caps and “cooling-off” measures to slow down suspicious deposits. The goal is twofold: to reduce the economic impact of scams and to gain valuable time to block abnormal movements. However, without effective upstream control mechanisms, such brakes risk intervening only when damage is already underway.

Prevention: what to do immediately and how not to fall into the trap

Quick actions if you suspect fraud

1. Stop the operation and keep receipts and screenshots.
2. Contact the local police immediately and report the incident to the consumer protection authority.
3. Note the model and position of the device; for more details, refer to https://oag.dc.gov/release/attorney-general-schwalb-sues-crypto-atm-operator.

Good practices to avoid being deceived

• Do not follow instructions received through calls or messages from strangers.
• Always check the fees displayed on the screen and request confirmations before sending funds.
• Choose services that have clear policies on costs and refund mechanisms.
• Promptly report any suspicious requests to law enforcement and the machine operator.

Possible Regulatory Interventions: Proportional KYC and Smart Monitoring

Experts are calling for the adoption of stricter anti-fraud requirements, calibrated based on the amount and risk. Among the recurring proposals are the obligation for timely reporting by operators, full disclosure of fees at every step – with numerical examples before confirmation – proportionate KYC/AML checks, and staff training to recognize signs of manipulation or coercion. That said, the effectiveness will depend on concrete implementation and the ability to enforce it.

The sector and Athena: numbers, competitors, systemic risks

Athena Bitcoin operates in a growing market, although subject to frequent abuses. According to CoinATMRadar (consulted on September 9, 2025), there are over 26,850 crypto ATMs active in the USA, with a fragmented market share among operators like Bitcoin Depot, CoinFlip, and Athena. In such a complex ecosystem, the quality of internal controls of the individual provider can make the difference between solid prevention and greater system vulnerability.

The company’s position: expected updates

So far, there are no specific public statements from Athena Bitcoin regarding this lawsuit. It should be noted that this is a civil action and not a final conviction: the company will have the opportunity to contest the charges and present its defenses in court. Further updates will be communicated in case of new official statements.

What changes for users: more transparency or does trust fade away

The procedure initiated in Washington could represent a turning point for the sector: if operators adopt clear fees and effective anti-fraud systems, trust can be strengthened; otherwise, the risk is a general decline in trust and the introduction of further restrictions. For those using crypto ATMs, the rule remains unchanged: thoroughly understand the costs, know how to recognize risk signals, and always proceed with caution.