Prosecutors Accuse 50 Unlicensed Bitcoin ATM Kiosks For Aiding Crypto Scams

Many crypto enthusiasts believe the growing trend of Bitcoin ATMs will drive 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 event shows that regulators clamped down on a BTC ATM operator and its executives for benefiting from scammers via the machines. The U.S. 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

The Cyber Fraud And Money Laundering Task Force indicted 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 allegedly benefited from crypto scam victims.

Another accusation was that the firm misrepresented the nature of its business to government agencies enabling it to operate without the proper licenses since 2018.

S&P Solutions and its executives are facing different charges, including conspiracy and money laundering. A grand jury in Cuyahoga County returned the indictment. The suspects were arrested last week, and the authorities searched their residences in Illinois and Florida. 

The prosecuting attorney, Andrew Rogalski, stated that law enforcement impersonators, romance scammers, and robocallers leveraged the non-existent Anti-Money Laundering protections in the firms’ systems to take money from users.

In Rogalski’s statement during a press conference, the firm prepared the Bitcoin ATMs for scammers to utilize efficiently. He also narrated the process through which the scammers defrauded the victims.

The scammers direct the target, mainly the elderly or another vulnerable group, to go to Bitcoin of America ATMs and put cash into the machine to collect BTC in a wallet that the scammers secretly control.

In one instance, a victim lost $11,250 to the scammers in one hour after making three transactions, and the firm collected a 20% fee for each transaction even when they knew the transactions were fraudulent. 

This latest event proves the latest warnings from the FBI’s Miami Field Office last year that Bitcoin ATMs facilitate scammers’ notorious fraud activities, especially in pig butchering scams. 

More Details of The Bitcoin ATMs Investigation

The U.S. Secret Service’s Cyber Fraud and Money Laundering Task Force is spearheading the investigation of 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, more of these ATMs still operate in Ohio and other states.

The attorney also revealed that the firm made up to $3.5 million in profits from the kiosks in 2021. It has been operating since 2018 and has allegedly evaded all regulatory requirements. 

Featured image from Pexels and chart from Tradingview.com