- Bitcoin Depot says police are damaging their $14,000 ATMs when they break them open to seize cash.
- The company argues they own the cash and will unlock machines if authorities bring proper warrants.
- Americans lost $247 million to crypto ATM scams in 2024, but Bitcoin Depot claims their involvement ends once customers complete transactions.
Bitcoin Depot executives have criticized law enforcement agencies for using excessive force to seize cash from cryptocurrency ATMs. The Georgia-based company argues that such actions constitute property damage and overreach of authority.
Chief Legal Officer Chris Ryan stated that police officers who physically break into Bitcoin ATMs are creating additional victims rather than helping scammed consumers. Recent incidents in Texas highlight the growing tension between cryptocurrency operators and law enforcement agencies attempting to recover stolen funds.
Law Enforcement Actions Damage Equipment Worth Thousands
A Texas incident involved authorities retrieving $32,000 from a Bitcoin Depot kiosk through brute force. Chief Operating Officer Scott Buchanan reported that the machine required complete replacement due to extensive damage caused during the cash seizure process.
Each Bitcoin Depot kiosk costs approximately $14,000 under the company’s profit-sharing program. Buchanan noted that most law enforcement seizures result in complete machine destruction, creating significant financial losses for the operator.
Ryan emphasized that Bitcoin Depot willingly unlocks machines when authorities present proper warrants. The company maintains that forceful entry methods are unnecessary and legally questionable.
The CLO explained that municipalities rarely compensate for damaged equipment despite Bitcoin Depot’s legal right to seek reimbursement. Most cases result in total financial losses for the company beyond the seized cash amounts.
Rising Crypto ATM Scam Losses Complicate Enforcement
According to FBI data, Americans lost at least $247 million to cryptocurrency scammers through crypto kiosks in 2024, representing a 31% increase from the previous year. To deceive victims, scammers typically impersonate government officials, law enforcement, or banking institutions.
The scam process involves criminals directing victims to insert cash into Bitcoin ATMs and transfer cryptocurrency to wallets controlled by fraudsters. Once transactions are complete, recovering the digital assets becomes extremely difficult due to blockchain technology’s irreversible nature.
Ryan stressed that Bitcoin Depot’s involvement ends when customers complete transactions. The company sells Bitcoin directly to users who provide wallet addresses to receive their cryptocurrency purchases. Victims unknowingly provide scammer-controlled wallet information, sending funds directly to criminals.
Court decisions have generally supported Bitcoin Depot’s position regarding cash ownership. In two separate cases, the Iowa Supreme Court ruled that the company retained rights to cash deposited by scam victims based on terms of service violations.
Bitcoin Depot’s user agreements specify that customers must provide personal wallet addresses rather than third-party destinations. The company includes warnings about potential scams when users attempt transactions involving external wallet addresses.
Ryan acknowledged sympathy for scam victims while maintaining that law enforcement agencies misunderstand the business model. He noted that some officers bypass warrant processes entirely, calling to announce forced entry plans without legal documentation.
The conflict reflects broader challenges facing cryptocurrency regulation and consumer protection as digital asset adoption continues expanding across traditional financial services.
Disclaimer
The content shared on KryptoVaultDaily is for informational purposes only and does not constitute financial or trading advice. We do not offer guarantees and assume no responsibility for investment decisions based on the material provided. Always research and seek guidance from a licensed financial advisor before trading cryptocurrency or investing.
