Texas Sheriff Seizes $32,000 From Crypto ATM To Recover Scam Funds

A Texas sheriff's unconventional approach to tackling a crypto scam has sparked a heated debate among digital asset enthusiasts. In Jasper County, northwest of Houston, Sheriff Chuck Havard took matters into his own hands after a local family was duped out of $25,000 by a scammer impersonating a government official. The fraudster instructed the victims to deposit the funds into a Bitcoin address via a local crypto ATM. To recover the money, Havard obtained a search warrant and physically cut open the machine, which was operated by Bitcoin Depot. He was ultimately able to retrieve around $32,000.

The sheriff’s actions sparked controversy, particularly online. Crypto users questioned whether the sheriff overstepped his authority, and some compared the move to seizing a store’s entire cash register after a fraudulent transaction. Critics argued that unless the ATM operator was involved in the scam, the destruction of private property and seizure of funds was unjustified. Havard, however, stood by his decision, stating that his primary goal was to protect Jasper County citizens from malicious actors and that he would continue to use all available resources to do so. Havard acknowledged that crypto-related crimes are difficult to resolve and confirmed that the scammer responsible for the incident has not been located yet.

This event occurred during a broader wave of scrutiny directed at crypto ATMs, which are increasingly being used in fraudulent schemes. The FBI reported nearly 11,000 crypto ATM scam complaints in 2024, totaling more than $246 million in losses. This is a 31% rise from the previous year. Australia has also taken steps to limit risk by capping cash deposits and withdrawals at crypto ATMs to AU$5,000. As the use of these machines grows, so too does the urgency to address the challenges they present in fraud prevention and consumer protection.

Cities like Spokane, Washington, are now banning these machines altogether due to a disproportionate impact on elderly and low-income victims. The Spokane City Council voted unanimously to approve the measure, which mandates the removal of all existing crypto ATMs within 60 days. Operators could face civil penalties and risk losing their business licenses. The city also plans to monitor the ban’s effectiveness and assess whether it actually leads to a measurable drop in crypto-related crimes. Spokane police detective Tim Schwering addressed the council, sharing cases in which victims were tricked into feeding money into these kiosks under the false belief that it would protect their savings or prevent legal consequences. The transferred funds often end up in overseas accounts, making recovery nearly impossible. Troublingly, two-thirds of the victims are over the age of 60, making this a growing issue among older Americans.

As cities take a hardline stance against crypto kiosks, the broader debate over regulation and consumer protection in the crypto space is picking up steam. Regulators and law enforcement now face increasing pressure to balance protection with due process. This event only added to the growing concerns about crypto ATM fraud, which caused $246 million in losses across nearly 11,000 reported scams in 2024 alone. Overall, regulators and law enforcement now face increasing pressure to balance protection with due process.