The Massachusetts Legal professional Normal is suing crypto ATM operator Bitcoin Depot for permitting criminals to make use of its machines to rip-off the state’s residents, the newest instance of accelerating scrutiny on the enterprise practices of one in every of the world’s largest operators of the machines.
“We’re alleging that as an alternative of dealing with customers’ cash in good religion, Bitcoin Depot used deceptive gross sales ways to overcharge its clients and knowingly facilitated crypto scams that robbed Massachusetts customers of greater than $10 million {dollars},” Massachusetts Legal professional Normal Andrea Pleasure Campbell mentioned in a press launch.
The swimsuit, filed Feb. 3, is the newest in a collection of comparable actions in opposition to crypto ATM operators throughout the nation in response to rising considerations that refined fraudsters are utilizing the machines to bilk victims, particularly the aged, out of lots of of thousands and thousands of {dollars} yearly.
The business says that the machines, which permit money to be exchanged for cryptocurrency at an automatic kiosk just like a financial institution ATM, present a handy approach for purchasers to buy digital cash like Bitcoin with out going via standard on-line crypto exchanges.
However legislation enforcement officers throughout the nation say they’ve seen an explosion in fraud involving the machines, with scammers utilizing them as a fast and straightforward method to transfer victims’ funds past the attain of authorities.
In 2024, the FBI obtained practically 11,000 fraud complaints involving crypto ATMs, a 99% improve from the earlier yr. The complaints represented about $247 million in alleged losses. These numbers are rising, with round $333 million misplaced to the identical sort of fraud between January and November 2025.
The abuse of the machines has prompted legislators at each the state and native ranges to place tighter safeguards on their use and even ban them completely.
And it has pushed lawsuits in opposition to the machines’ operators by state lawyer generals in Iowa and D.C.
Over half of the cash that handed via Bitcoin Depot kiosks in Massachusetts between August 2023 and January 2025 was scam-related, in line with the grievance.
In an announcement to ICIJ, Bitcoin Depot wrote “We strongly disagree with the characterization that Bitcoin Depot facilitates scams or misleads customers.” The corporate, it mentioned, has “constructed our enterprise round compliance and shopper safety,” working with legislation enforcement to handle felony exercise on the machines and implementing a number of safeguards to guard its clients from scams.
On Tuesday, the firm introduced that it could require clients to confirm their identification for each transaction.
The allegations in opposition to Bitcoin Depot echo these from a 2025 lawsuit by Iowa’s lawyer common. In that case, an evaluation concluded that greater than 50% of the firm’s transactions in the state between October 2021 and July 2024 appeared to contain scams.
As an alternative of dealing with customers’ cash in good religion, Bitcoin Depot used deceptive gross sales ways to overcharge its clients and knowingly facilitated crypto scams.
—Massachusetts Legal professional Normal Andrea Pleasure Campbell
Since their invention in the early 2010s, crypto ATMS, that are primarily present in fuel stations, liquor retailers and comfort shops, have quickly unfold throughout the United States. A 2025 investigation by ICIJ and CNN revealed how Bitcoin Depot machines put in in lots of of Circle Ok comfort shops have facilitated a minimum of $1.5 million in rip-off transactions. Circle Ok obtained thousands and thousands of {dollars} in rental charges from the partnership, whereas Bitcoin Depot pocketed a reduce of every transaction, taking between 15% and 50% p.c of the deposits for itself.
The investigation additionally discovered that Circle Ok administration was conscious the machines had been getting used to defraud clients and even their very own workers. However the comfort retailer chain selected to resume its contract with Bitcoin Depot anyway.
Bitcoin Depot was lengthy conscious that its machines had been getting used for scams, in line with the Massachusetts grievance, which alleges that members of the firm’s due diligence staff in 2021 concluded that 90% of consumers the staff interacted with had been rip-off victims. One worker warned a high Bitcoin Depot govt that its kiosks had been “facilitating cash laundering at an ‘excessive quantity.’”
Bitcoin Depot subsequently made a few of its compliance measures “much less efficient,” the grievance alleges, noting that “this transformation facilitated extra fraud.”
In the meantime, the firm’s personal inner metrics confirmed that between 13% and 16% of the cash that handed via its machines from March to September of 2023 was scam-related, in line with the grievance.
At the identical time, prosecutors allege, the firm authorized transactions that “ought to have raised crimson flags,” together with clients utilizing a number of kiosks on the identical day. “Many transactions authorized by Bitcoin Depot had blatant discrepancies,” the grievance mentioned: “A few of the clients used pretend names like ‘John Wick’ and the ‘Chosen One.’”
The corporate additionally allowed its clients to ship funds to overseas cryptocurrency exchanges that don’t enable U.S. clients to create accounts, prosecutors wrote.
At the least one different state lawyer common has opened an investigation into Bitcoin Depot’s enterprise practices. In December, Catherine Hanaway of Missouri despatched the firm, and 4 of its opponents, letters demanding they flip over proof associated to suspected violations of the state’s shopper safety legal guidelines.
In a press launch, Hanaway mentioned the investigations had been launched in response to “devastating new scams involving the use of Bitcoin ATMs to prey on Missourians.”
“Our Workplace is investigating regarding allegations concerning hidden charges and misleading costs on these machines and can maintain dangerous actors accountable.”
