Bitcoin ATMs, the now-ubiquitous machines in fuel stations and smoke outlets that convert bodily money to cryptocurrency, are in bother.
Over the previous few months, the Canadian authorities introduced a proposal to ban the scam-prone machines whereas Tennessee, Minnesota and Indiana handed laws to outlaw them. Simply final week, the world’s largest operator of those ATMs, Bitcoin Depot, filed for bankruptcy, citing litigation and authorities motion. Consultants and authorities have for years warned in regards to the machines’ heavy use by criminals, who depend on them as a handy means to gather funds from scam victims.
However because the crackdown on crypto ATMs widens, one crucial side of the scam ecosystem has escaped scrutiny: the crypto giants which have enabled these ATM operations by means of huge transfers of bitcoin. As a result of these machines typically absorb money and convert that money to bitcoin, the crypto essential to make such conversions are important to the ATM companies.
At ICIJ’s request, a group of cryptocurrency investigators traced billions of {dollars} in bitcoin transfers from brand-name crypto companies on to the coffers of ATM corporations, at the same time as authorities issued more and more dire warnings about potential prison exercise. ICIJ discovered that after attorneys normal in Massachusetts, Iowa and Washington, D.C., alleged that prime ATM operators had been dealing closely in scam transactions, main crypto corporations continued promoting them large sums of bitcoin.
This included U.S.-based change Kraken, which has transferred no less than $1.1 billion value of bitcoin to crypto ATM operators lately. ICIJ discovered that Kraken despatched the ATM operator Athena Bitcoin no less than $17 million value of cryptocurrency after District of Columbia authorities singled out its machines final September.
“Athena’s bitcoin machines have turn into a device for criminals intent on exploiting aged and susceptible District residents,” D.C. Lawyer Normal Brian Schwalb stated in a assertion on the time. “Athena is aware of that its machines are getting used primarily by scammers but chooses to look the opposite approach.”
Athena Bitcoin has rejected these allegations. In response to questions from ICIJ, Kraken stated that it takes its regulatory obligations critically and maintains sturdy compliance controls. In a assertion, a spokesperson stated its “enterprise relationships are topic to rigorous onboarding, ongoing due diligence, and enhanced monitoring requirements.”
Between Could 2020 and March 2025, the crypto agency Gemini offered greater than half a billion {dollars} in bitcoin to Bitcoin Depot. Cumberland DRW, a crypto buying and selling agency based by billionaire Don Wilson, has additionally been a main provider of bitcoin to crypto ATM companies, together with Bitcoin Depot and CoinFlip, in keeping with blockchain researchers.
Cumberland and Gemini didn’t reply to requests for remark.
In some circumstances, large crypto gamers offered bitcoin to ATM operators that had been later criminally charged, ICIJ discovered. For example, the crypto change Bitstamp despatched no less than $7 million to a agency known as Crypto Dispensers between 2018 and 2024 — which fell inside a timeframe when the agency used its ATM community for cash laundering, in keeping with a federal indictment.
Bitstamp didn’t reply to requests for remark. Firas Isa, the founding father of Crypto Dispensers, who can be underneath indictment for cash laundering, advised ICIJ in an interview that Bitstamp carried out rigorous audits on his agency. Isa denies the allegations within the indictment, which states that his agency obtained giant quantities of cash derived from crimes together with from scam victims.
At ICIJ’s request, a half-dozen specialists who focus on analyzing bitcoin transaction data on the general public ledger often called the blockchain helped look at and ensure particulars of those transactions. These specialists included Fredric Buret, of the crypto investigations agency Recoveris, and Joshua Cooper-Duckett of the agency Cryptoforensic Investigators.
Jason Ghetian, a former FBI agent specializing in crypto scams, advised ICIJ that the suppliers of huge quantities of bitcoin to crypto ATMs ought to have been cautious of these enterprise relationships, given the machines’ popularity for being closely utilized by criminals. “These exchanges may shut these ATMs down in the event that they don’t present liquidity for them,” Ghetian stated.
The businesses haven’t, nonetheless, damaged the regulation by offering the ATMs with bitcoin liquidity. Lately, the crypto business’s greatest gamers have vigorously sought to be accepted as a part of the mainstream monetary system, with Kraken simply this 12 months being the primary to receive approval for a so-called grasp account with the Federal Reserve. Even amid this push for broader recognition, probably the most distinguished crypto companies stay deeply entwined with a a part of the business that lawmakers world wide are scrambling to guard shoppers from.
‘How can folks be so merciless?’
The primary bitcoin ATM went dwell in late 2013 in Vancouver, Canada, creating a quick bridge from money to cryptocurrency. By combining money and cryptocurrency — two types of cash which can be tough to hint — the machines offered a excessive stage of anonymity for customers searching for to maneuver funds discreetly.
Because the machines unfold throughout the globe, criminals took notice. A key function of the machines is their potential to maneuver funds throughout nationwide borders with deep anonymity and few checks. Because the business has grown quickly, issues about bitcoin ATMs have solely mounted. In 2021, the FBI warned that criminals had been more and more counting on these providers to obtain funds from scam victims. As soon as victims deposit cash into a bitcoin ATM — typically on the behest of a scammer who has satisfied them they’re funding their very own crypto accounts — the cryptocurrency is usually despatched abroad, the place it will probably hardly ever be recovered.
Consultants and native regulation enforcement officers have raised a regular stream of alarms in regards to the machines. In 2024, the U.S. Federal Commerce Fee known as crypto ATMs “a cost portal for scammers.” Regardless of that, tens of hundreds of the machines stay in operation round the USA.
The biggest ATM operators have been voracious shoppers of bitcoin, which allows cash-to-cryptocurrency conversions, in keeping with specialists. “When you’re doing lots of of tens of millions in quantity, you could have a place the place you possibly can shortly purchase bitcoin,” stated Marc Grens, whose enterprise DigitalMint operated a nationwide community of the machines for almost a decade. “You want a giant sufficient supply that means that you can purchase sufficient bitcoin to replenish your stock on demand.”
Grens stated his agency exited the ATM enterprise as a result of pervasiveness of scams. “Cleansing up fraud means you’re not making income,” Grens stated.
Previous to its chapter final week, Bitcoin Depot had almost 10,000 crypto ATMs working world wide — from Alaska to Tasmania. In a lawsuit towards Bitcoin Depot filed in early 2025, Iowa’s lawyer normal alleged that its evaluation of the corporate’s machines within the state confirmed that between October 2021 and July 2024 greater than half of the transactions concerned scams.
Cleansing up fraud means you’re not making income — former crypto ATM operator Marc Grens
Bitcoin Depot has denied wrongdoing, saying that it “can’t be held chargeable for the prison acts of third-party scammers, particularly contemplating the sturdy warnings and safeguards offered” on its machines and through transactions.
The New York-based Gemini crypto change, owned by the billionaire Winklevoss twins, offered Bitcoin Depot with greater than half a billion {dollars} value of bitcoin lately. These transactions seem to have ended with a March 2025 bitcoin transfer of roughly a half-million {dollars}.
The Winklevosses have positioned Gemini on the heart of a push to permit crypto companies to self-regulate by way of a personal crypto affiliation that may incentivize “the detection and deterrence of manipulative and fraudulent acts and practices.”
Blockchain analysts have examined cash flows from crypto ATMs and located pink flags that, in idea, are seen to anybody with high-quality cryptocurrency evaluation instruments. In 2024, the evaluation agency TRM stated it had discovered recurring patterns pointing to cash laundering throughout lots of of crypto ATMs. The agency stated obvious monetary crime threat indicators of the ATMs had been “considerably greater than common threat scores for crypto exchanges,” in a evaluation of transactions linked to machines in California.
ICIJ reviewed the exercise of one high-volume cryptocurrency handle — just like a checking account — owned by Bitcoin Depot. That handle used the bitcoin it had available to ship out transactions initiated by customers of Bitcoin Depot ATMs. Brad Thorne, a police detective in Boise, Idaho, who investigates crypto scams, stated he had seen the identical handle used to transmit victims’ bitcoin in additional than a hundred circumstances. “That handle reveals up persistently in my investigations,” Thorne stated.
The Bitcoin Depot handle additionally obtained sizable bitcoin transfers from Gemini. Between 2021 and March 2025, Gemini accounts despatched tens of tens of millions of {dollars} value of cryptocurrency to the handle.
Ann Tatem, a 77-year-old resident of Lake Metropolis, Florida, misplaced a lot of her life financial savings to a scammer counting on a Bitcoin Depot ATM utilizing this identical cryptocurrency handle, in keeping with specialists who reviewed the transaction. In April 2025, Tatem, exhausted after a lengthy evening of caring for her sick husband, activated her pc to a flashing display warning that she’d been hacked and instructing her to name a 1-800 quantity. When she dialed the quantity, she spoke with a individual claiming to be with the Federal Commerce Fee. That individual advised her authorities wanted to freeze her financial institution accounts and, to safeguard her funds, directed her to deposit $10,000 in money into a native Bitcoin Depot ATM.
I couldn’t eat, I couldn’t sleep. It was like, how can folks be so merciless? — crypto ATM scam sufferer Ann Tatem
Tatem had joined hundreds of People who’ve collectively misplaced lots of of tens of millions of {dollars} to classy scammers counting on ATMs to quickly convert victims’ money into cryptocurrency. In all of those crimes, regulation enforcement has little likelihood of tracing the cryptocurrency to an proprietor.
“That was a lot of our financial savings. We’re easy folks,” Tatem stated, including that the crime left her traumatized. “I couldn’t eat, I couldn’t sleep. It was like, how can folks be so merciless? It’s simply past my comprehension.”
A ‘silent accomplice to many scammers’
Over the previous six months, the state of Connecticut suspended Bitcoin Depot’s banking license for lapses in anti-money laundering controls; Missouri’s lawyer normal opened an investigation into a number of crypto ATM operators, together with Bitcoin Depot; and Nevada and Maine settled enforcement actions with the agency, requiring it to pay fines and adjust to state guidelines. Massachusetts’ lawyer normal additionally lately sued Bitcoin Depot, alleging most of its income was derived from scams.
One other main sender of cryptocurrency to Bitcoin Depot was Cumberland DRW, the crypto arm of the Chicago-based buying and selling agency DRW, based by billionaire and famed dealer Don Wilson. He made headlines final 12 months when DRW invested $100 million into a Trump household crypto venture shortly after the U.S. Securities and Alternate Fee dropped an investigation into Cumberland, in keeping with the Monetary Occasions. In a March submitting, Bitcoin Depot named Cumberland, Gemini and different companies as its bitcoin suppliers.
Even after Gemini appeared to cease sending funds to Bitcoin Depot in March 2025, Cumberland continued to take action, in keeping with specialists who reviewed the transactions. These transactions lasted till March 30, 2026.
In response to the specialists ICIJ consulted, Cumberland can be a key supplier of cryptocurrency to CoinFlip, which has been recognized because the world’s second-largest bitcoin ATM operator behind Bitcoin Depot. Iowa’s lawyer normal sued CoinFlip final 12 months, alleging that every one of its prime 20 crypto ATM customers in Iowa, amongst many others, had been scam victims.
“At greatest, CoinFlip is a willfully blind participant within the victimization of lots of of Iowans,” in keeping with the state’s lawsuit. “At worst, it’s a silent accomplice to many scammers preying on Iowans.”
CoinFlip didn’t present remark for this story. In an April submitting, the agency’s legal professionals stated Iowa authorities have deployed baseless accusations in a “smear marketing campaign” that has broken its standing with regulators, legislators, shoppers and enterprise companions. The agency has denied that it allows or tolerates scammers on its machines and known as the Iowa go well with an “unmistakable assault on the character of cryptocurrency itself.” CoinFlip stated it requires its clients to learn a number of fraud-related warnings and disclaimers when utilizing its machines.
Lately, Cumberland has despatched CoinFlip over a billion {dollars} value of bitcoin, in keeping with specialists who reviewed the transactions. These transactions had been as giant as $5 million apiece, the specialists stated.
Till mid-2024, CoinFlip additionally obtained roughly $1.5 billion value of bitcoin from London-based dealer Enigma Securities, in keeping with the specialists. Enigma Securities is a subsidiary of the Makor Group. Like Cumberland, Enigma Securities labels itself as a so-called crypto liquidity supplier, giving companies quick entry to wholesale parts of assorted cryptocurrencies. Crypto ATMs have been successfully banned from working in the UK as a result of authorities haven’t granted a licence to any of the companies.
Enigma Securities didn’t reply to requests to touch upon this story.
The specialists who reviewed information for ICIJ stated that Enigma Securities was a bitcoin liquidity supplier to the crypto ATM operator Bitcoin of America, which was shut down in 2023 after its founder, Sonny Meraban, was arrested in Florida for working ATMs with out correct licensing. Meraban advised ICIJ that, earlier than his arrest, his agency used a number of providers, together with Enigma Securities and FalconX, a crypto buying and selling firm headquartered in San Mateo, California. Meraban stated he used accounts with a number of exchanges in order that he may store round for the most affordable bitcoin to enhance his revenue margins.
“We would have liked a lot of bitcoin and had been linked as much as exchanges to get that bitcoin day by day,” stated Meraban, who pleaded responsible in 2023 to fees referring to his agency’s licensing. “That is how the enterprise mannequin works.”
Enigma Securities didn’t reply to requests for remark. FalconX declined to offer remark for this story.
ICIJ discovered that Kraken has performed a key position in supplying bitcoin to a number of main crypto ATM operators lately, together with greater than $700 million in bitcoin to Coinhub and no less than $245 million in bitcoin to Byte Federal, in keeping with specialists who reviewed these transactions.
Coinhub didn’t reply to a request for remark. In an interview with ICIJ, Byte Federal’s CEO Paul Tarantino stated Kraken is the agency’s sole liquidity supplier. “We have now a actually good relationship with Kraken,” he stated.
Tarantino stated that Byte Federal is a chief in anti-fraud measures. In early 2024, he stated, Byte Federal started rigorously vetting all clients over the age of 60, leading to 84% of these would-be clients being blocked resulting from scam issues. He added that the variety of these guests to his firm’s machines has lately fallen, nonetheless. “Scammers that get ahold of those seniors are making a determination to not ship them to our kiosks.”
Kraken’s relationship with Athena Bitcoin, one other prime crypto ATM operator, seems to have expanded in late 2023. The change started sending the agency greater than a million {dollars} value of bitcoin every week on common till mid-2025, when the tempo slowed, in keeping with the specialists.
Final September, Washington D.C.’s lawyer normal alleged that 93% of Athena Bitcoin’s transactions concerned a scam, saying the agency “fails to offer efficient oversight, creating an unchecked alternative for illicit worldwide fraud.”
Following the authorized motion, Athena Bitcoin told a native information station that it “strongly disagrees with the allegations” and that it’ll combat the fees. The agency stated it has “a number of safeguards, from distinguished warnings and every day transaction limits to 5 separate verification screens designed to cease coerced transactions,” in keeping with the report.
The day after the D.C. lawyer normal’s announcement, a Kraken account despatched Athena greater than $270,000 value of bitcoin in a single transaction, in keeping with specialists ICIJ consulted. And Kraken accounts continued to ship giant quantities of cryptocurrency to Athena Bitcoin, amounting to about $17 million as of March 31, 2026, when the transfers seem to have stopped, the specialists stated.
Athena didn’t reply to requests to remark for this story. In a March submitting, Athena Bitcoin known as Kraken its “major crypto change.” In a subsequent submitting dated Could 14, Athena didn’t point out Kraken.
In March, Kraken turned the primary crypto agency accredited for a Federal Reserve grasp account, which permits the change to maneuver conventional cash immediately by way of U.S. central banking infrastructure, a privilege by no means earlier than granted to a crypto agency. Republican Sen. Cynthia Lummis of Wyoming, a proponent of the crypto business, known as the approval a “watershed second for the digital asset business” and a “monumental step in direction of making funds safer, quicker, and cheaper.”
Final month, the FBI launched new figures exhibiting that crypto ATM scams had lately surged, with People shedding $389 million referring to the machines in 2025. These scams particularly focused People over 60, like Ann Tatem.
Tatem advised ICIJ that the lack of retirement financial savings pressured her to money out her life insurance coverage plan. “I simply hope one thing will be carried out about these machines,” she stated.
