Bitcoin of America, a Bitcoin technology company, and three of its executives are facing charges of money laundering, conspiracy, and other crimes related to the operation of more than 50 unlicensed cryptocurrency kiosks in Ohio that knowingly profited from victims of cryptocurrency scams. The firm, doing business as S&P Solutions, allegedly pocketed a 20% transfer fee every time a scam occurred and continued to do so even after learning they were fraudulent.

According to prosecutor Andrew Rogalski, romance scammers, law enforcement impersonators and “robocallers” exploited the lack of anti-money laundering protections in the company’s systems to transfer funds from users’ crypto wallets. . These scammers directed victims, who are often elderly or vulnerable, to specifically go to Bitcoin of America ATMs, take the money they have withdrawn from their savings or 401K accounts, and place the cash in the machine at exchange of BTC in a wallet that they believe is theirs but they have no control over it.

During a press conference, Rogalski commented that “these ATMs are set up for scammers,” adding that they take advantage of the victims, who are often elderly or vulnerable. In one case, an elderly man lost $11,250 in three transactions at one of the questionable kiosks in less than an hour due to this scam.

The company and its executives allegedly operated the kiosks without a money transfer license and were able to do so by making false written statements about the nature of their business to government agencies. Authorities seized 52 Bitcoin ATMs last week, but the company has more in Ohio and other states. Bitcoin of America made $3.5 million in profit from cash deposits at these illegal kiosks in 2021, Rogalski said.

Officials believe the company has been operating and evading regulatory safeguards and financial compliance requirements since 2018. The investigation of the company and its executives was reportedly led by the Cyber ​​Fraud and Money Laundering Task Force. United States Secret Service money.

This allegation comes after the FBI’s Miami field office warned in October that crypto ATMs were becoming a popular vehicle for scammers to defraud victims in a growing trend of “pig-killing” scams. . It highlights the importance of proper regulation and compliance in the cryptocurrency industry to protect vulnerable people from fraudulent activity.