Iowa Court Rules to Support Bitcoin ATM Operators in Scammed Money Cases

The Iowa Supreme Court held that some of the separate frauds must be returned to the company rather than the victim, and that the money paid to Bitcoin Depot ATM must be returned to the company in order to overturn the lower court’s decision.

Two scams occurred in July 2023 and February 2024. At that time, the corresponding victim was contacted individually by the fraudster and forced to relocate. Bitcoin It’s worth $14,000 via Bitcoin Depot ATM in Linn County.

Police seized the cash they deposited as part of the investigation, but were unable to retrieve the transferred BTC.

The district court found that a total of $28,000 in cash would need to be returned to the victims, urging Bitcoin Depot to appeal to the Iowa Supreme Court.

According to a ruling from Judge Dana Oxley, the victim signed a contract with Bitcoin Depot ATM to warn the victim of potential fraud prior to the transfer of the BTC they purchased.

The victim had designated that he owned a wallet sending BTC, as it was the only way to complete the transfer using Bitcoin Depot ATM.

However, one victim, Carrie Carlson, argued that the contract she signed with Bitcoin Depot should be voided as she was acting under obsession.

However, the Iowa Supreme Court ruled there was no way to know that Carlson and the other victims were acting under obsession.

“Here, the fact that Bitcoin Depot has acknowledged and warned its customers about risks and use of ATMs in the industry, acknowledging that it is not liable for all inappropriate transactions, up to the point where it prohibits transactions unless the user identifies the wallet as theirs,” she writes.

The court therefore ruled that “remands the case with instructions to return the seized funds to Bitcoin Depot,” and excludes the victim from his pocket.

Bitcoin Depot said Decryption To support the importance of due process and strengthen the role that crypto operators can play in preventing and dealing with fraud.

“Bitcoin Depot respects the Iowa Supreme Court’s decision, sees it as a positive step to clarify the legal framework surrounding crypto transactions and affirm the importance of working with compliant, transparent operators like Bitcoin Depot,” the spokesperson said.

The company is separately caught up in a bigger legal battle in Iowa after Attorney General Brenna Byrd sued the company and ATM provider Coinflip in February.

According to the allegations, the Iowans lost about $20 million as a result of sending funds through Bitcoin Depot and Coin Flip.

The Attorney General’s Office says that fraud accounts for 98.16% of Iowanians since they launched a survey of cryptocurrency ATM companies in October 2023 (Coinflip’s corresponding percentage is 94.92%).

Bird also claims that Bitcoin Depot and Coin Flip have taken a 23% and 21% reduction in all cryptocurrency transactions sent via their respective ATMs, and that Bitcoin Depot is misleading about the terms of its refund policy.

“We already know that (the con artists) are targeting old Iowans, but now it appears that widows (…) and crypto ATM companies are reducing profits through deaths,” Byrd said.

Decryption I contacted Coinflip for comments.

Bitcoin Depot said Decryption You already have several layers of protection implemented, including identity verification, transaction monitoring, live support, and automated fraud warnings.

“Our dedicated law enforcement liaison team, serving as former law enforcement staff, works closely with agencies across the country,” the spokesman said. “We regularly assist investigators in using blockchain analytics to track transactions, collect stolen funds and help resolve active cases. We will continue to support and support law enforcement wherever possible.”

Edited by James Rubinand his team also discusses that internally. So you’re very excited and stay behind how things go when building the product suite itself. I think they chose a much harder area to build towards something like automating and creating access to similar algorithmic trading strategies.