Bitcoin News Today: Elderly Victims Trapped in Hidden Fees as Bitcoin ATM Firm Faces Legal Firewall

The District of Columbia’s Office of the Attorney General has filed a lawsuit against Athena Bitcoin, Inc., a major operator of Bitcoin Automated Teller Machines (BTMs), alleging the firm facilitates financial scams targeting elderly and vulnerable residents while profiting from undisclosed fees. The lawsuit highlights that 93% of deposits processed through Athena’s BTMs in the District during its first five months of operation were directly linked to scams, with nearly half of those flagged as fraudulent by the company. The median age of scam victims was 71, and the median loss per transaction was $8,000, with some victims losing over $98,000 in multiple transactions [1].

The complaint alleges Athena’s BTMs are frequently used by scammers due to the irreversible nature of cryptocurrency transactions and the lack of adequate anti-fraud measures. The Office of the Attorney General (OAG) found that Athena’s own internal data indicated 48% of deposits were reported as scams by users, yet the company failed to address these vulnerabilities. The machines are also said to be attractive to criminal actors because of Athena’s minimal oversight and lack of effective consumer protection protocols [1].

Athena is accused of charging hidden fees of up to 26% per transaction without disclosing them to consumers. The lawsuit states that these fees are embedded in a “fee-inclusive price” displayed as the exchange rate on Athena’s interface, with no explicit mention of the fees on the company’s website or during the transaction process. This, according to the OAG, misleads customers into believing they are receiving a fair market rate for Bitcoin. In one example detailed in the complaint, a user was charged as if Bitcoin was trading at $80,300 per unit when the market price was approximately $60,000, leading to a $2,500 fee being collected by Athena [2].

The company is also accused of implementing a strict “no refunds” policy, which denies victims of scams the ability to recover their losses—even the hidden fees. The lawsuit claims that Athena’s refund policy either denies restitution altogether or arbitrarily limits it, despite the company being capable of returning the fees collected from fraudulent transactions. Additionally, victims seeking refunds are reportedly required to sign disclaimers absolving Athena of future liability, which further complicates their ability to seek justice [1].

In response to the allegations, an Athena spokesperson stated the company employs multiple safeguards, including prominent warnings, transaction limits, and verification screens, to protect users and prevent fraudulent activities. The spokesperson added that the company is confident in its protocols and will defend itself in court. Athena’s stock, which trades over-the-counter, rose 8.5% to $0.02 in early trading on the day the lawsuit was filed, despite a year-to-date decline of 83% [2].

The OAG is seeking to compel Athena to comply with District laws, secure restitution for victims, and impose penalties. The lawsuit also calls for Athena to modify its business practices to prevent further exploitation of vulnerable residents. Attorney General Brian L. Schwalb emphasized the urgency of the case, stating that the company's actions have “enabled criminals to exploit the elderly and vulnerable,” and that the office is committed to stopping such conduct before more residents are harmed [1].

Source:

[1] Office of the Attorney General, District of Columbia (https://oag.dc.gov/release/attorney-general-schwalb-sues-crypto-atm-operator)

[2] Yahoo Finance (https://finance.yahoo.com/news/atm-operator-athena-bitcoin-profits-190318848.html)

[3] WJLA (https://wjla.com/news/local/dc-attorney-general-schwalb-sues-athena-bitcoin-crypto-atm-cryptocurrency-scams-washington-seniors-fraud-financial-exploitation-hidden-fees-teller-machines-consumer-protection-lawsuit-investigation)