Prosecutors accuse 50 unlicensed Bitcoin ATM kiosks of aiding crypto fraud
Many crypto enthusiasts think so growing trend for Bitcoin ATMs will lead to more adoption, given the ease of access. But Bloomberg reported last year that the crypto winter affected Bitcoin ATMs.
While the community complains about the impact of these drops on BTC adoption, a recent incident shows that regulators cracked down on a BTC ATM operator and its managers for taking advantage of fraudsters via the machines. The US Secret Service’s Cyber Fraud and Money Laundering Task Force seized over 50 kiosks in its investigation of S&P Solutions.
S&P Solutions and its executives face charges
Cyber Fraud and Money Laundering Task Force defendant S&P Solutions, a bitcoin technology firm, and three executives, Sonny Meraban, Reza Maraban and William Suriano, for operating 50 unlicensed cryptocurrency kiosks in Ohio. The defendants are said to have benefited from crypto fraud victims.
Another charge was that the firm misrepresented its business to government agencies, allowing it to operate without the proper licenses since 2018.
S&P Solutions and its executives face various charges, including conspiracy and money laundering. A Cuyahoga County grand jury returned the indictment. The suspects were arrested last week, and authorities searched their homes in Illinois and Florida.
The prosecutor, Andrew Rogalski, stated that law enforcement impersonators, romance scammers and robocallers exploited the non-existent anti-money laundering protections in the firms’ systems to take money from users.
In Rogalski’s statement under a press conference, the firm prepared the Bitcoin ATMs so that fraudsters can use them effectively. He also told about the process by which the fraudsters defrauded the victims.
The scammers direct the target, mainly the elderly or some other vulnerable group, to go to Bitcoin of America ATMs and deposit cash into the machine to collect BTC in a wallet that the scammers secretly control.
In one case, a victim lost $11,250 to the scammers in one hour after making three transactions, and the firm charged a 20% fee for each transaction even when they knew the transactions were fraudulent.
This latest incident proves latest warnings from the FBI’s Miami Field Office last year that Bitcoin ATMs facilitate the notorious fraudulent activities of fraudsters, particularly in the area of hog fraud.
More details on the Bitcoin ATM survey
The US Secret Service’s Cyber Fraud and Money Laundering Task Force is leading the investigation into S&P Solution and its executives. Based on Rogalski’s statement, the task force has seized up to 52 Bitcoin ATMs belonging to S&P Solutions. However, several of these ATMs still operate in Ohio and other states.
The lawyer also revealed that the firm earned up to $3.5 million from the kiosks in 2021. It has been operating since 2018 and has reportedly avoided all regulatory requirements.
Featured image from Pexels and chart from Tradingview.com
