DC Attorney General Sues Athena Bitcoin Over Alleged Hidden Fees and Fraud Risks

Washington DC Attorney General Files Lawsuit Against Athena Bitcoin

The Washington, DC Attorney General’s office has initiated legal action against Athena Bitcoin, a crypto ATM operator, alleging the company charged undisclosed fees on deposits it knew were associated with scams. The lawsuit also accuses Athena of failing to implement adequate anti-fraud protections to prevent exploitation.

Allegations of Hidden Fees and Scam-Related Transactions

Attorney General Brian Schwalb revealed that during Athena’s first five months of operation, approximately 93% of deposits were linked directly to fraudulent schemes. The lawsuit claims Athena imposed consumer fees of up to 26% per transaction without transparent disclosure. Instead, the company referred to a vague “Transaction Service Margin” in its Terms of Service, never explicitly mentioning fees.

Schwalb criticized Athena’s no-refund policy, which he says obstructs victims’ recovery of losses stemming from undisclosed fees and scams. “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,” he stated.

Impact on Vulnerable Populations

The suit highlights that many victims were elderly or otherwise vulnerable, with a median victim age of 71 and median loss per transaction of $8,000. One individual reportedly lost $98,000 through a scam facilitated at an Athena kiosk. The Attorney General’s office alleges that Athena pocketed hundreds of thousands of dollars in undisclosed fees from these victims between May and September 2024.

Broader Context of Crypto ATM Fraud

This lawsuit coincides with an intensified crackdown on crypto ATM fraud nationwide. The FBI has reported nearly 11,000 fraud complaints related to crypto kiosks in 2024, totaling over $246 million in losses. In response, at least 13 states, including Arizona, Colorado, and Michigan, have enacted transaction limits to curb such fraud.

According to CoinATMRadar, the United States currently hosts 26,850 crypto ATMs. Bitcoin Depot leads the market with 27.6% of machines, followed by CoinFlip and Athena with 13.6% and 13%, respectively.

Legal and Consumer Protection Claims

The lawsuit charges Athena with deceptive and unfair trade practices, including violations of laws designed to protect vulnerable adults from financial exploitation. Schwalb’s office asserts Athena’s inadequate oversight created an unchecked pipeline for illicit international fraud transactions, enabling scammers to coerce and manipulate victims into depositing substantial sums.

Advice to Consumers on Avoiding Crypto ATM Scams

Attorney General Schwalb advises users to avoid sending funds to unknown parties, particularly those who initiate unsolicited contact. Scammers often impersonate crypto tech support or traders promising high returns with minimal risk. Victims are urged to verify any requests through official channels and refrain from engaging with random solicitations.

Historical Context of Undisclosed Fee Scandals in Finance

Issues with undisclosed fees are not unique to crypto ATMs. The banking sector has faced similar controversies, including a $1.2 billion fee refund order against Discover Bank and a $3.7 billion fine imposed on Wells Fargo for illegal mortgage fees. Bank of America also faced penalties exceeding $250 million for so-called “junk fees” in recent years.