Bitcoin Depot Clo Chris Ryan says US law enforcement is beyond their authority using Brute Force to seize cash from Bitcoin ATMs. According to Ryan, the funds seized by police from these Bitcoin ATMs belong to Atlanta, the Georgia-based provider of these machines.
The update comes after news last week filtered into space when Texas officials used brute force to acquire $32,000 from Bitcoin Depokiosk. According to an update to Bitcoin Depot COO Scott Buchanan, law enforcement has cut out the actual body of the kiosk, and the machine will need to be replaced completely. Ryan said law enforcement is liable for damages to these machines despite attempting to return large sums of money to fraudulent users.
Bitcoin Depot Con sheds light on the impact of seeing cash from Bitcoin ATMs
According to the company’s website, Bitcoin Depot Kiosk costs around $14,000 under the profit sharing program.
“These fraudulent law enforcement officers believe these consumers are doing the right thing,” Ryan said. “What they are doing is creating another victim who is us, and the damage to our property and the seizing of our funds.”
According to Buchanan, Bitcoin ATMs are always destroyed in most cases like this. He also added that if the authorities are trying to seize funds from Bitcoin Depokiosk, the company will always unlock the machine. Ryan added that while the company is within the right to seek a refund from law enforcement if Bitcoin Depot’s property is damaged, local governments cannot always step into the bill. “It’s not the norm for us to get something back,” he said.
Ryan added that Bitcoin Depot feels like people being scamned via Bitcoin ATMs, but the company has the right to maintain cash. He added that officers do not understand the company’s business model or the fact that it’s customer’s Bitcoin that’s already been stolen. “When that transaction is completed, the user inserts cash and the crypto funds the wallet of choice, and your involvement in the transaction ends,” Ryan said.
Bitcoin ATM scam kicks up in the US
The scammers use Bitcoin ATMs and the fact that transactions performed using machines are irreversible from money to default people. These offenders have increased their activities in the US over the past few months, impersonating government, law enforcement, or banks.
In 2024, Americans lost at least $247 million to crypto fraudsters via crypto kiosks, according to an FBI report. When a scammer receives the victim’s Bitcoin in his wallet, it is difficult to collect the funds.
When a customer uses a Bitcoin ATM, they insert cash into the machine. According to Bitcoin Depot, they will then sell Bitcoin directly to users. To complete the transaction, the user must provide a wallet to receive Bitcoin. In this case, the user will always provide a wallet belonging to a scammer, thereby sending Bitcoin directly to the bad actor. There was also confusion in the court when authorities offered a warrant request indicating that the victim lost cash as part of the proceeds of the crime, not the bitcoin that the fraudster had fled.
Ryan also emphasized that law enforcement will seize funds from Bitcoin Depot within a year, noting that most of these actions do not involve brute force. “There’s another subset that doesn’t go through the warrant process at all,” Ryan added. “They’ll call us and say, ‘We’re about to break into your machine.’ ”
Although states have laws on such issues, the Iowa Supreme Court ruled this year that Bitcoin Depot is entitled to the cash paid by the victim for the Bitcoin transaction. This is primarily due to the terms and services of the company where the depositor is permitted to present only the wallets that belong to him. While using the machine, Bitcoin Depot says it is warning users that third-party addresses can lead to fraud.
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