DOJ Cracks Down on Crypto ATMs in $10M Money Laundering Case

Federal prosecutors have indicted Firas Isa, founder and CEO of Chicago-based Virtual Assets LLC (doing business as Crypto Dispensers), in a multi-year money laundering scheme allegedly involving $10 million in illicit proceeds from fraud and drug trafficking. The indictment, unsealed in the Northern District of Illinois, accuses Isa of converting cash and other funds deposited into his company's cryptocurrency ATMs into digital assets and routing them through virtual wallets to obscure their origins. Isa and his company have pleaded not guilty, with a status hearing scheduled for January 30, 2026 according to court filings.

The case highlights growing scrutiny of crypto ATMs, which have become focal points for law enforcement amid surging scams and regulatory uncertainty. Prosecutors allege that Isa's network, which operated ATMs at convenience stores and gas stations nationwide, knowingly facilitated transactions involving criminal proceeds. "The indictment alleges that Isa knew the money was derived from fraud," the Department of Justice stated. This comes as the DOJ announced in April 2025 a strategic shift to prioritize criminal misuse of digital assets-such as terrorism financing and narcotics trafficking-over prosecuting service providers for user actions according to reports.

The timing of the charges coincides with broader federal efforts to combat crypto-related crime. Last week, the DOJ, FBI, and U.S. Secret Service launched a "Scam Center Strike Force" targeting cross-border fraud schemes, including so-called "pig butchering" operations. The initiative has already seized over $400 million in cryptocurrency linked to scams, underscoring heightened enforcement against illicit use of digital assets. Meanwhile, states like Illinois have begun manding crypto ATM operator registration to enhance oversight.

The case against Isa also reflects a broader trend of regulatory fragmentation. While the DOJ has scaled back its National Cryptocurrency Enforcement Team (NCET), state attorneys general and international agencies continue aggressive crackdowns. For example, Malaysia's national utility company, Tenaga Nasional, reported $1.1 billion in losses from illegal electricity use by cryptocurrency miners between 2020 and 2025. Similarly, a separate U.S. case saw a crypto mixer co-founder sentenced to four years in prison for aiding money laundering efforts.

Industry experts warn that the Isa case could prompt stricter anti-money laundering (AML) requirements for crypto infrastructure providers. "This indictment exposes vulnerabilities in cash-to-crypto systems," said one compliance analyst, noting that Bitcoin ATMs often lack robust know-your-customer (KYC) protocols. The SEC's own enforcement data, meanwhile, revealed a 30% drop in actions against public companies in FY 2025, though the agency emphasized a renewed focus on investor protection and market integrity according to official filings.

If convicted, Isa faces up to 20 years in prison, and prosecutors could seek forfeiture of assets tied to the alleged scheme. The outcome may influence future regulatory frameworks, particularly as lawmakers debate balancing innovation with crime prevention in the crypto space.