Attorney General Brian L. Schwalb has launched a legal battle against Athena Bitcoin, Inc., accusing the cryptocurrency ATM operator of predatory practices, including undisclosed high fees and inadequate protection against scams targeting District residents, particularly the elderly. According to an official release from Schwalb's office, the lawsuit alleges that Athena's Bitcoin ATMs (BTMs) have become tools for financial exploitation, with statistics highlighting a staggering 93% of deposits stemming from fraudulent activity.
The investigation carried out by the Office of the Attorney General (OAG) uncovered details that illuminate the gravity of the situation, where nearly half of all Athena BTM deposits were flagged as fraudulent, victims with a median age of 71 lost an average of $8,000 per scam with one unfortunate individual parting with $98,000 in multiple transactions. According to the OAG's findings, these machines are used for illicit purposes due to lax oversight from Athena, effectively providing criminals with a conduit for their schemes which cause severe financial harm to the victims.
Athena, operating seven BTMs within the District, stands accused of violating the District's Consumer Protection Procedures Act and Abuse, Neglect, and Financial Exploitation of Vulnerable Adults and the Elderly Act. The OAG's release states that "Athena is well aware that the safeguards it has implemented are insufficient to protect customers from fraud," with almost half of the funds deposited resulting in consumer complaints of scams directly to the company.
Besides the facilitation of financial scams, Athena also faces scrutiny for its non-transparent fee structure, which can reach up to 26% per transaction, a figure starkly contrasting with the usual 0.24% to 3% range found on other platforms and exchanges. Though a vague reference to a "Transaction Service Margin" was added to service terms, Athena sidestepped a clear disclosure of the actual fees, according to the Attorney General's office, "Athena’s bitcoin machines have become a tool for criminals intent on exploiting elderly and vulnerable District residents." The lawsuit aims to force Athena to adhere to District law, compensate the victims, and require Athena to face penalties for their actions.
Assistant Attorneys General Anabel Butler and Jason Jones, Investigator Lu Lagravinese, and Civil Rights and Elder Justice Section Chief Alicia M. Lendon are leading the charge on this case.
.jpg){kind=link}