Iowa files lawsuit against Bitcoin Depot and CoinFlip for crypto scams
Iowa has taken legal action against Bitcoin Depot and CoinFlip, the state’s two largest cryptocurrency ATM operators, for their failure to prevent Iowans from falling victim to scammers who tricked them into sending millions of dollars through their kiosks. Attorney General Brenna Bird revealed these lawsuits, highlighting the magnitude of the issue and the impact on vulnerable individuals.
An investigation initiated in October 2023 by the Iowa Attorney General’s office aimed to uncover the extent of fraudulent activities involving cryptocurrency ATM companies. Subpoenas were issued to 14 crypto ATM companies, with a focus on compiling a list of Iowans who had been affected by these schemes. By reaching out to victims and analyzing complaints, police reports, and reported scams, the investigation revealed that over $20 million had been sent through Bitcoin Depot and CoinFlip ATMs in less than three years, predominantly affecting elderly individuals, especially those over 60 years old.
Attorney General Bird condemned the nefarious actions of scammers, emphasizing their predatory nature towards older Iowans, even going as far as targeting widows through obituaries. These perpetrators manipulate victims into believing they need assistance and then direct them towards crypto ATMs for transactions, profiting from the victims’ losses. By taking a substantial portion of the funds transferred, Bitcoin Depot and CoinFlip are complicit in the fraudulent activities, with Bitcoin Depot claiming a 23% cut and CoinFlip asserting a 21% fee.
The lawsuits filed against Bitcoin Depot and CoinFlip by the Iowa Attorney General allege that these companies directly benefit from scam victims by charging excessive and often undisclosed transaction fees. Moreover, Bitcoin Depot is accused of misleading Iowans regarding its refund policy, breaching the Iowa Consumer Fraud Act. Attorney General Bird is steadfast in her pursuit to seek justice for Iowans who have been swindled and to hold these crypto ATM companies accountable for their deceitful practices.
The ongoing investigation into cryptocurrency ATM companies underscores the urgency of addressing these scams and protecting consumers from financial harm. With the prevalence of digital assets and the increasing use of crypto ATMs, it is imperative to enhance regulatory measures and safeguards to prevent further exploitation of unsuspecting individuals. By shedding light on these fraudulent activities and taking legal action, Iowa is taking a stand against financial crimes and advocating for consumer protection in the evolving landscape of digital currencies.
