Bitcoin Depot Lawsuit Claims Elderly Consumers Regularly Targeted by Crypto ATM Scams at Circle K Stores

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Bitcoin Depot and Circle K Stores face a proposed class action lawsuit that alleges the companies are well aware that older consumers are routinely targeted in financial scams involving the former’s cryptocurrency ATMs yet have done little to protect against elder fraud, money laundering and other illegal transactions. 

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The 34-page Bitcoin scam lawsuit alleges that although Circle K and Bitcoin Depot know that the latter’s crypto ATMs are “commonly used to facilitate elder financial scams … in addition to money laundering, the sale of illegal goods and services, and other crimes,” neither defendant has made any meaningful effort to combat the problem, allegedly given that “they derive substantial profit” from the ATMs through the sale of Bitcoin “at an exorbitant markup” from the currency’s actual market value. 

According to the suit, Bitcoin Depot and Circle K are unconcerned about charging such exorbitant markups on Bitcoin ATM transactions because they’re aware that a “substantial portion” of their market base uses the ATMs for nefarious purposes, such as to launder money into Bitcoin that is untraceable and accepted at myriad online marketplaces globally. Moreover, the defendants know that a sizable amount of the market base for Bitcoin ATMs, of which there were more than 3,000 nationwide as of 2021, is comprised of “unsophisticated investors” who do not know better than to buy Bitcoin at a “usurious rate,” not unlike that charged by predatory payday loan lenders, the filing states. 

The crypto lawsuit, filed in South Carolina, accuses Bitcoin Depot and Circle K of intentionally failing to implement effective procedures to combat Bitcoin ATM scams, as doing so would “thwart a substantial volume of their business” and the profits they gain from “every dollar inserted into the ATM.”

According to the complaint, Bitcoin Depot and Circle K entered a strategic partnership in 2021 through which Bitcoin Depot ATMs would be placed in Circle K stores. Circle K has 255 stores in South Carolina, and there are 145 Bitcoin ATMs statewide operated by Bitcoin Depot, the suit notes. The lawsuit, citing the Federal Trade Commission, shares that more than 46,000 people between January 2021 and June 2022 reported having been the victim of cryptocurrency sca, with losses surpassing $1 billion total and with Bitcoin as the most common cryptocurrency victims reported paying to scammers. 

Although Bitcoin Depot expressly highlights in an article on its website that seniors are especially vulnerable to crypto scams, and although the defendants have received a litany of complaints from consumers, the purported measures taken by the company and Circle K Stores have been largely ineffective, the case reiterates.

The lawsuit looks to cover all persons who have suffered damages as a result of the “dangers created and/or enabled and the Defendants’ lack of due care” in addressing this known behavior associated with Bitcoin ATM machines, particularly the use of the ATMs in “predatory scams against the elderly.” 

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