Washington D.C. Attorney General Files Lawsuit Against Athena Bitcoin, Inc.
Attorney General Brian L. Schwalb of Washington, D.C., announced a legal case against Athena Bitcoin, Inc. on Monday. The lawsuit accuses the Bitcoin ATM operator of neglecting scams aimed at elderly residents and not disclosing high fees.
Charges Against Athena Bitcoin
Athena, which operates 4,100 Bitcoin ATMs across five countries, faces two counts of violating the Consumer Protection Procedures Act due to unfair trade practices. Additionally, the company is charged with exploiting vulnerable older adults.
Stock Market Reaction
Following the lawsuit announcement, Athena’s over-the-counter stock surged by 8.5% to $0.02, although it has seen an 83% decline this year, according to Yahoo Finance.
Athena’s Defense
A representative from Athena stated to Decrypt that the company strongly contests the allegations and is prepared to defend itself in court. They emphasized that robust safety measures and consumer education are in place to safeguard clients from scams.
Issues with Bitcoin ATM Usage
Bitcoin ATMs allow cash exchanges for cryptocurrency but are often misused by scammers to retrieve funds from victims. A complaint revealed that 93% of funds deposited into Athena’s ATMs in the first five months were linked to fraud. In 2023, the FBI reported $189 million in losses from Bitcoin ATM scams.
High Fees and Misleading Practices
The lawsuit claims that while some crypto exchanges charge fees up to 3%, Athena charged Washington D.C. customers as much as 26% without appropriate disclosure. The lawsuit highlights that fees were embedded in what was labeled the ‘exchange rate’ without mention on Athena’s website.
Consumer Confusion and Legal Implications
Athena allegedly does not provide detailed receipts that itemize fees, contributing to consumer confusion regarding the actual costs. The lawsuit alleges this markup increases relative to the size of the customer’s order, further complicating matters when victims, especially the elderly, are involved.
