Prosecutors Accuse 50 Unlicensed Bitcoin ATM Kiosks For Aiding Crypto Scams
Many cryptocurrency enthusiasts believe that the growing trend of Bitcoin ATMs will drive further adoption given ease of access. But Bloomberg reported last year that crypto winter affected Bitcoin ATMs.
While the community is complaining about the impact of these declines in BTC adoption, a recent event shows that regulators cracked down on a BTC ATM operator and its executives for taking advantage of scammers through the machines. The U.S. Secret Service’s Cyber Fraud and Money Laundering Task Force seized more than 50 kiosks in its investigation of S&P Solutions.
S&P Solutions and its executives face allegations
Cyber Fraud and Money Laundering Task Force indicted S&P Solutions, a bitcoin technology company, and three executives, Sonny Meraban, Reza Maraban and William Suriano, for operating 50 unlicensed cryptocurrency kiosks in Ohio. Defendants allegedly benefited from crypto fraud victims.
Another accusation was that the company misrepresented the nature of its business to government agencies, allowing it to operate without 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 authorities searched their homes in Illinois and Florida.
Prosecuting attorney Andrew Rogalski claimed that law enforcement impersonators, romance scammers and robocallers took advantage of the non-existent anti-money laundering protections in the companies’ systems to take money from users.
In Rogalski’s statement during a Press conference, the company prepared Bitcoin ATMs for scammers to use efficiently. He also chronicled the process by which scammers defrauded victims.
Scammers direct the target, mostly seniors or another vulnerable group, to go to Bitcoin of America ATMs and put money into the machine to collect BTC into a wallet that the scammers secretly control.
In one case, a victim lost $11,250 to the scammers within an hour after making three transactions, and the company charged a 20% fee for each transaction, even though the transactions were known to be fraudulent.
This last event proves the Latest Notices from the FBI Field Office in Miami in the last year, Bitcoin ATMs facilitate the notorious fraud activities of scammers, especially in pig slaughter scams.
More Details From The Investigation Of Bitcoin ATMs
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 seized up to 52 Bitcoin ATMs belonging to S&P Solutions. However, more of these ATMs still operate in Ohio and other states.
The lawyer also revealed that the company 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