Bitcoin ATM firm accused of profiting from crypto scams via unlicensed machines: U.S. Secret Service

Bitcoin ATM firm accused of profiting from crypto scams via unlicensed machines: U.S. Secret Service

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A cryptocurrency technology firm and three of its executives have been indicted for allegedly operating unlicensed Bitcoin ATMs in the U.S. that profited from victims of crypto scams, according to the United States Secret Service late last week. 

See related article: Crypto scammers seize on AI frenzy as fraudulent ChatGPT tokens flood markets

Fast facts

  • The executives and their company, S&P Solutions, which ran as Bitcoin of America in the U.S., face charges of money laundering, conspiracy, and other crimes related to the operation of 52 unlicensed crypto ATMs in the state of Ohio.
  • An investigation conducted by the Secret Service’s Cyber Fraud and Money Laundering Task Force revealed that the firm operated cryptocurrency ATMs in Ohio without a money transmission license while falsely representing the machine’s nature of the business to Ohio regulators. 
  • According to the agency, scammers and robocallers seized on Bitcoin of America’s lack of consumer protections and anti-money laundering measures, using their machines to launder funds from victims across the U.S. 
  • A report from the U.S. Federal Bureau of Investigation’s Miami office warned in October 2022 that crypto ATMs were emerging as a popular method that scammers use to receive funds from their victims. Data from American blockchain analytics firm Chainalysis showed that at least US$67.5 million in funds were sent from crypto ATMs to illicit crypto addresses in 2022. 
  • Bitcoin of America would profit an average of 20% off the transfer of defrauded victims’ funds through their machines, and would retain the fees even after being notified of fraud.
  • Search warrants were executed on the residences of S&P Solutions owner and founder Sonny Meraban, manager Reza Meraban, and company attorney and manager William Suriano on March 1, with the trio all arrested and the ongoing. 

See related article: Head of crypto, FX trading platform EminiFX pleads guilty to US$248 million fraud charges

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