Topic: Bitcoin ATM firm allegedly profited from crypto scams via unlicensed kiosks (Read 142 times)
March 06, 2023, 02:06:50 PM
Only thing I really see to be fishy in this case is the unlicensed nature of these kiosks. Mind you, a lot of ATMs and banks have been involved with scams in the past as well, but they got away with it scot-free because they have operational licenses that allow them to at least be absolved from the crime. In any case, I don't think this is a massive blow to the cryptocurrency community if that's a problem you're looking for. Plus, I don't really see the appeal of these kiosks, and I never saw anyone ever use a bitcoin ATM in the past. It's also a bit convoluting to think that a government sector was sure about pressing fraud charges against an ATM company without prior evidence being present. If they're able to present proof that these ATMs are indeed being used to defraud people who are none the wiser when it comes to crypto, which I should say, is a whole level of stupidity, then I might just believe the company should accept the fraud charges.
March 06, 2023, 12:50:04 PM
Even if the machine is licensed, how will the company be able to know that the customer is sending money to a scammer? How can they detect that the funds being transferred are not safe, or will the regulation give the ATM machines a special anti-scam detector to install?
What happened on this unlicensed ATM can still happen in any licensed one, but the risk can only be reduced up to some certain percentage, and the customer will be asked a series of questions to be sure he or she knows where the funds being sent are going.
If not just as a regular customer with good intentions will work into the ATM machine to make a deposit using cash, that's the same way scam victims move straight to the machine to do the same thing—the same way, the same method, the same pattern.
What happened on this unlicensed ATM can still happen in any licensed one, but the risk can only be reduced up to some certain percentage, and the customer will be asked a series of questions to be sure he or she knows where the funds being sent are going.
If not just as a regular customer with good intentions will work into the ATM machine to make a deposit using cash, that's the same way scam victims move straight to the machine to do the same thing—the same way, the same method, the same pattern.
I'm just wondering: if this Bitcoin ATM took a 20% transfer fee from the innocent guy that got scammed for $11,250
I learned from my previous post that this is just like the regular fee that Bitcoin ATMs charge their customers, ranging from 5-24% on every deposit they make using the machine. hero member
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March 06, 2023, 12:15:10 PM
Quote
S&P Solutions, which operated as Bitcoin of America, along with three of its executives, are facing charges of money laundering, conspiracy and other crimes connected to the operation of more than 50 unlicensed crypto kiosks in the state.
Authorities seized 52 Bitcoin ATMs last week, but the firm has more in Ohio and other states. Bitcoin of America made $3.5 million in profit from cash deposits at these unlawful kiosks in 2021, Rogalski said.
Officials believe the firm has been operating and evading regulatory safeguards and financial compliance requirements since 2018.
Authorities seized 52 Bitcoin ATMs last week, but the firm has more in Ohio and other states. Bitcoin of America made $3.5 million in profit from cash deposits at these unlawful kiosks in 2021, Rogalski said.
Officials believe the firm has been operating and evading regulatory safeguards and financial compliance requirements since 2018.
This is crazy. Running more than 50 unlicensed Bitcoin ATM kiosks in the United States should have earned them a lot of money to become licensed and registered, but they stayed unlicensed, avoiding taxation and perhaps trying to cover up their travesties. The article mentioned that they have been operative since 2018, which have been a long time since they started. I wonder what they were thinking—that they might not be noticed. The prosecutor is right about their conviction. If this was a registered company, perhaps the scammy acts faced by users may have been detected.
Quote
Meanwhile, the company allegedly pocketed a 20% transfer fee each time this occurred and continued to do even after learning they were fraudulent.
He added that in one instance, an elderly gentleman lost $11,250 in three transactions to one of the dodgy kiosks in under an hour to this scam.
He added that in one instance, an elderly gentleman lost $11,250 in three transactions to one of the dodgy kiosks in under an hour to this scam.
I'm just wondering: if this Bitcoin ATM took a 20% transfer fee from the innocent guy that got scammed for $11,250 and that earned this firm $9,000 all at once, how about people that got scammed for more than $11,000 and spent the 20% fee? This really confirms that this company would have really obtained a license if they wanted to.
March 06, 2023, 12:01:04 PM
If not surprised to read Bitcoin ATM has been used to scam people, in this space, I believe nothing is impossible and people with questionable characters will always look for a way to dupe innocent people. My friend once used bitcoin as a means of payment in a shopping mall in one of the states in Nigeria and have had to wait for over 1 hour after payment for the acknowledgement, from his end, the transaction was successful but the sales rep was claiming not to have been credited, it took extra confrontation for them to agree to the payment.
March 06, 2023, 10:48:23 AM
Is the prosecutor right?
The prosecutor is right and also the person involved in this kind of mess is wrong and a fool, using a bitcoin ATM is secured enough because they operate under a licensed corperate organization but using a kiosk for bitcoin transaction is a very wrong decision because the people or persons you're dealing with are not secured or regulated, p2p is meant to be performed on the atmosphere where the escrow provider are trusted, anything you're not sure of shouldn't be assumed, a fact must be established, only a newbie can fall their hands in this.
March 06, 2023, 07:35:30 AM
Is that not possible on licensed bitcoin ATMs too?
It practically is possible with licensed ATMs as well. There is the appearance of security when a user has to use personal details to set up a account and with that can be tracked if they end up scamming someone. In reality, scammers still use such licensed platforms to carry out their activities.
What I think is that those scam are also possible on licensed bitcoin ATM machines. It can only be avoided if the victims know the scam and avoid it by themselves. Am I wrong?
I agree with you. Regulations does not provide security, information does.- Jay -
March 06, 2023, 07:14:09 AM
With AML there a limits as to how much you can take in and out at a time.
In *theory* they have a better idea of who is converting fiat to BTC.
Would it have helped in these situations, perhaps in some small way.
The issue is now, there were 10s of thousands of dollars moved to scammers / criminals and no way to track the victims.
More importantly since they were operating unlicensed machines, they don't know what they don't know.
BTC purchases from straw buyers for other criminal things.
People avoiding the tax people
and so on.
The issue also is there are licensed ATMs that people could have used so there were also taking money out of the pockets of people who did things the proper way.
-Dave
In *theory* they have a better idea of who is converting fiat to BTC.
Would it have helped in these situations, perhaps in some small way.
The issue is now, there were 10s of thousands of dollars moved to scammers / criminals and no way to track the victims.
More importantly since they were operating unlicensed machines, they don't know what they don't know.
BTC purchases from straw buyers for other criminal things.
People avoiding the tax people
and so on.
The issue also is there are licensed ATMs that people could have used so there were also taking money out of the pockets of people who did things the proper way.
-Dave
March 06, 2023, 06:12:05 AM
Says Prosecutor.
This is the link: https://cointelegraph.com/news/bitcoin-atm-firm-profited-from-crypto-scams-via-unlicensed-kiosks-secret-service
Is the prosecutor right?
The prosecutor is right because Bitcoin of America was not given license and also may not be following anti money laundering and counter terrorism financing laws and procedures.
But in those type of scam, the scammer decoy the victim to pay into his bitcoin address and the victim which has not seen such people before and believe them transfer bitcoin to the scammer and they are scammed. Is that not possible on licensed bitcoin ATMs too? Which makes the prosecutor to be fully correct.
What I think is that those scam are also possible on licensed bitcoin ATM machines. It can only be avoided if the victims know the scam and avoid it by themselves. Am I wrong?
This is the link: https://cointelegraph.com/news/bitcoin-atm-firm-profited-from-crypto-scams-via-unlicensed-kiosks-secret-service
Quote
According to the prosecuting attorney Andrew Rogalski, romance scammers, law enforcement impersonators, and “robocallers” exploited the lack of Anti-Money Laundering protections in the firm’s systems to transfer funds out of users’ crypto wallets.
Is the prosecutor right?
The prosecutor is right because Bitcoin of America was not given license and also may not be following anti money laundering and counter terrorism financing laws and procedures.
But in those type of scam, the scammer decoy the victim to pay into his bitcoin address and the victim which has not seen such people before and believe them transfer bitcoin to the scammer and they are scammed. Is that not possible on licensed bitcoin ATMs too? Which makes the prosecutor to be fully correct.
What I think is that those scam are also possible on licensed bitcoin ATM machines. It can only be avoided if the victims know the scam and avoid it by themselves. Am I wrong?
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