Bitcoin ATM CEO Arrested
The bitcoin vending kiosks often get called “Bitcoin ATMs”. They get called “BTMs” for that matter. Noted on Fox8 —
In Brief Summary
- Bitcoin of America did not have a license for Ohio for “money transmission” terminals
- Three arrested including the CEO
- 50 Bitcoin “ATMs” seized (Mostly neighborhood gas stations)
- BOA has around 2,500 “ATMs” in 31 states
- 8 victims but “tip of the iceberg”
- They are all charged with one count of engaging in a pattern of corrupt activity, one count of conspiracy, eight counts of money laundering, eight counts of receiving stolen property, 33 counts of license requirement violation, five counts of tampering with records, one count of possessing criminal tools and one count of taxation.
- The news5cleveland people have a nice video summarizing everything.
Video
Excerpt
Prosecutors say the machines were frequently, and in some cases exclusively, used as a middleman between scammers and their victims. All the while, prosecutors say Bitcoin of America took 20% off the top of every illegal transaction.
The Secret Service also says that the company’s lack of licensing and compliance with the law allowed for funds taken from Northeast Ohio to go to criminal groups in Russia and to neo-Nazi groups.
Insight
The 20% markup was in addition to the standard transaction fee markup which was ??. Was there anything limiting the size of the transaction? Unknown.
California has proposed limiting the transaction fee markup the bitcoin kiosk operators can charge. 2% or $5.
Many of the bitcoin kiosks are operated in underserved communities and are a positive factor for the stores there.
Seems related to Cannabis and cash in that regulatory controls have been avoided. Congress seems more interested in disagreeing with each other than working with each other.
ref: CA bill bitcoin
More Coverage
- Nice video and summary from News5Cleveland
- short paragraph notation on networld sites
- Arrests announced in cryptocurrency investigation involving Bitcoin of America kiosks in Northeast Ohio
- 3 men, 1 business charged in cryptocurrency scam; avoid Bitcoin of America ATMs, Cuyahoga Co. prosecutor says