DC Attorney General Alleges Athena Bitcoin Profited from Scam Fees

TLDR

• DC AG sues Athena Bitcoin, alleging hidden fees and fraud targeting vulnerable residents, especially the elderly.
• Athena Bitcoin accused of profiting from undisclosed fees of up to 26%, impacting scam victims.
• DC lawsuit claims Athena failed to prevent scams and did not refund victims, including elderly residents.
• The lawsuit targets Athena for inadequate oversight, allowing fraud to thrive at crypto ATMs.
  

The District of Columbia’s Attorney General, Brian Schwalb, has filed a lawsuit against Athena Bitcoin, a major operator of Bitcoin Automated Teller Machines (BTMs), for allegedly charging hidden fees on deposits tied to scams. The lawsuit also accuses Athena of failing to implement adequate anti-fraud measures, despite knowing that its machines were being used to facilitate fraud, particularly targeting vulnerable residents, including the elderly.

According to Schwalb’s office, 93% of deposits to Athena Bitcoin’s BTMs during the first five months of operations in Washington, DC, were the result of scams. The lawsuit further claims that Athena profited from these fraudulent transactions, pocketing significant undisclosed fees and preventing victims from recovering their losses due to a strict no-refund policy.

Athena Bitcoin’s Hidden Fees and Lack of Fraud Protection

The lawsuit focuses on Athena Bitcoin’s practice of charging consumer fees as high as 26% per transaction without properly disclosing these charges. Schwalb’s office asserts that Athena misled customers by using terms like “Transaction Service Margin” instead of directly labeling the charges as fees. Victims, many of whom were elderly, allegedly lost substantial amounts of money while using Athena’s machines, which Schwalb argues were poorly monitored and lacked sufficient safeguards.

The AG’s office claims that during the initial five-month period of operation, Athena’s machines were used to facilitate fraud, often involving elderly users who were coerced into depositing large sums into the machines. In one instance, a victim reportedly lost $98,000 in multiple fraudulent transactions. The median age of victims was 71, with the median loss per transaction reported at $8,000.

Schwalb also criticized Athena for its inadequate oversight of the BTMs, claiming that the company allowed fraud to persist by not monitoring the machines effectively. The lack of proper monitoring created an environment where scammers could easily exploit vulnerable users.

The No-Refund Policy and Its Impact on Victims

One of the most concerning aspects of the lawsuit is Athena’s no-refund policy, which prevents victims from recovering their funds, including the undisclosed fees charged during fraudulent transactions. 

Schwalb’s office argues that Athena could easily have refunded the victims, as the company had the ability to return the fees it collected, but chose not to.

In many cases, scam victims were forced to sign releases that waived Athena’s liability, effectively shielding the company from responsibility for the fraudulent transactions. 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.”

Legal Action and Broader Crypto ATM Concerns

This lawsuit is part of a broader crackdown on crypto ATMs, which have been increasingly used in scams. The FBI reported nearly 11,000 complaints of fraud related to crypto ATMs in 2024, totaling over $246 million in losses. Many states, including Arizona, Colorado, and Michigan, have already implemented transaction limits on crypto ATMs to curb fraudulent activity.

Athena’s practices come under scrutiny alongside similar cases involving hidden fees and fraud in other sectors. Schwalb’s office seeks to force Athena to comply with District law, secure restitution for victims, and impose penalties on the company for its role in enabling fraud.

The DC Attorney General’s office is committed to protecting vulnerable residents, particularly the elderly, from financial exploitation. Schwalb advised crypto ATM users to avoid sending funds to individuals they have not met, particularly if they were contacted by someone who claims to represent a financial institution or service.

The lawsuit against Athena Bitcoin aims to not only seek justice for the victims of fraud but also to ensure greater accountability and transparency in the growing crypto ATM industry.

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