Massachusetts Attorney General Andrea Joy Campbell has filed a lawsuit against Bitcoin Depot, one of the largest crypto ATM operators in the United States, alleging the company knowingly facilitated cryptocurrency scams that defrauded residents of over $10 million. The suit, filed February 3, marks the latest escalation in scrutiny surrounding the rapidly growing industry of crypto ATMs and their vulnerability to illicit activity. This action comes as federal and state authorities grapple with a surge in fraud linked to these machines, which allow users to convert cash into cryptocurrency without traditional banking oversight.
The core of the complaint centers on allegations that Bitcoin Depot not only failed to prevent fraudulent transactions but actively contributed to them through misleading sales tactics and a deliberate weakening of compliance measures. According to the Attorney General’s office, more than half of all money processed through Bitcoin Depot kiosks in Massachusetts between August 2023 and January 2025 was tied to scams. The lawsuit seeks to hold Bitcoin Depot accountable for its alleged role in enabling these financial crimes and to secure restitution for affected consumers.
Crypto ATMs have become increasingly prevalent across the U.S., often located in convenience stores, gas stations, and liquor shops. While proponents argue they offer a convenient way to access cryptocurrency, law enforcement officials have warned of their appeal to fraudsters. The FBI reported receiving nearly 11,000 fraud complaints involving crypto ATMs in 2024, a staggering 99% increase from the previous year, representing approximately $247 million in losses. That figure has continued to climb, with an estimated $333 million lost to similar scams between January and November 2025.
Internal Warnings Allegedly Ignored
The Massachusetts complaint paints a picture of a company aware of the risks but prioritizing profit over consumer protection. According to the lawsuit, Bitcoin Depot’s own due diligence team found in 2021 that approximately 90% of customers they interacted with were likely victims of scams. One employee reportedly warned a top executive that the kiosks were “facilitating money laundering at an ‘extreme volume.’” Despite these internal warnings, the Attorney General alleges that Bitcoin Depot subsequently made changes to its compliance procedures that actually increased the risk of fraud.
The complaint further details instances where Bitcoin Depot allegedly approved transactions that should have raised red flags, including customers using multiple kiosks in a single day and employing obviously false names like “John Wick” and “The Chosen One.” Prosecutors likewise claim the company allowed funds to be sent to foreign cryptocurrency exchanges that are inaccessible to U.S. Customers, a common tactic used by scammers to obscure the flow of illicit funds.
Broader Crackdown on Crypto ATM Operators
The legal action in Massachusetts is not isolated. Similar lawsuits have been filed against crypto ATM operators in Iowa and Washington D.C., reflecting a growing national concern over the industry’s vulnerability to fraud. In December, Missouri Attorney General Catherine Hanaway launched investigations into Bitcoin Depot and four other companies, citing concerns about hidden fees and deceptive practices. Hanaway stated her office would “hold subpar actors accountable” for preying on Missourians.
The issue has also prompted legislative action. State and local lawmakers are considering tighter regulations on crypto ATMs, including potential bans, in an effort to curb the rising tide of scams. The ease with which scammers can exploit these machines – often targeting vulnerable populations like the elderly – has fueled the push for greater oversight.
Circle K Partnership Under Scrutiny
An investigation by the International Consortium of Investigative Journalists (ICIJ) and CNN revealed a significant partnership between Bitcoin Depot and Circle K convenience stores. The investigation found that Bitcoin Depot machines installed in hundreds of Circle K locations facilitated at least $1.5 million in scam transactions, while Circle K received millions in rental fees and a percentage of each transaction – between 15% and 50%. The report also alleged that Circle K management was aware of the fraudulent activity but continued to renew its contract with Bitcoin Depot.
In response to the growing pressure, Bitcoin Depot announced on Tuesday that it would require customers to verify their identity for every transaction. However, critics argue that this measure is a reactive step that should have been implemented long ago.
Bitcoin Depot, in a statement to the ICIJ, strongly disagreed with the characterization of its role in facilitating scams, asserting that the company has “built our business around compliance and consumer protection” and actively works with law enforcement. The company maintains it has implemented safeguards to protect customers.
The Massachusetts case is expected to proceed in state court. A hearing date has not yet been set. Consumers who believe they have been victimized by scams involving Bitcoin Depot are encouraged to contact the Massachusetts Attorney General’s office for assistance. The ongoing investigations and legal challenges signal a heightened level of scrutiny for the crypto ATM industry and a growing determination to protect consumers from fraud.
Disclaimer: This article provides information about a legal matter and should not be considered legal advice. If you have been the victim of a cryptocurrency scam, consult with a qualified legal professional.
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