Iowa Attorney General Sues Bitcoin ATM Companies Bitcoin Depot and Coin Flip for Allowing Iowans to Be Scammed Out of $20 Million

Iowa Attorney General Brenna Bird says she is suing the cryptocurrency ATM companies Bitcoin Depot and Coin Flip for allowing Iowans to be scammed out of 20 million dollars in three years.

The Iowa Attorney General Brenna Bird is suing cryptocurrency ATM companies Bitcoin Depot and Coin Flip for allowing Iowans to be scammed out of $20 million in three years.

Bitcoin Depot and CoinFlip profit directly from Iowa scam victims by imposing excessive, and often hidden, transaction fees, according to the lawsuits. The suit also alleges that Bitcoin Depot deceives Iowans about its refund policy.

Attorney General Bird’s investigation found that Bitcoin Depot takes a 23% cut of the money sent through the machines, and CoinFlip claims 21%. The Attorney General is suing both companies for violating the Iowa Consumer Fraud Act.

The investigation into crypto ATM companies is ongoing.

Also speaking at the news conference was Iowa Bankers Association president Adam Gregg, who talked about scams.

“Every day in the United States, 57,000 Americans are scammed. That’s enough to fill a baseball stadium, and they’re scammed out of enough money to build that stadium, $430 million every day from 57,000 Americans every day,” Gregg says.

Gregg says cryptocurrency machines are being used in the latest scam.

“Whatever the specifics, the scammers create an urgent reason for victims to take cash from their bank account in the Bitcoin ATM. The cryptocurrency ATM is the key method by which scammers actually get their hands on the funds,” Gregg says. He says crypto ATM scammers are fooling a lot of people.

“According to the FTC, fraud losses to these types of crypto ATMs top $65 million just in the first six months of 2024.”

Attorney General Bird says it’s almost impossible to recover the money once it is sent through one of these machines.

A woman named Loree who is a retired nurse and widow, was a victim of a bitcoin scam.

“It all started with an urgent call from Amazon to return the call, and it was regarding a iPhone that I ordered. Well, I don’t even have an Amazon account,” she says. She says the woman told her several fraudulent accounts had been opened up in her name.

Loree says she then got a call from someone who said he was a federal marshal.

“He proceeded to tell me that I was there was a warrant out for my arrest for money laundering, and if I didn’{~}t use him to help eradicate my case, then I would be extradited to Texas and face trial there.”

Loree says the man told her to go to the federal marshal’s website and check for his name and there was someone with the name he gave her. The fake marshal then told her to take out $25,000 to help them create a secure account so they could catch the scammer. The money was put into the bitcoin machine and sent to various banks.