Massachusetts Attorney General Andrea Joy Campbell has launched one of the most aggressive consumer protection cases yet against the rapidly expanding cryptocurrency kiosk industry, filing a sweeping lawsuit that accuses Bitcoin Depot of building its Massachusetts business model not only on hidden fees and misleading pricing, but on the backs of scam victims who were systematically drained of millions of dollars.

The newly filed complaint paints a troubling picture of how Bitcoin Depot’s Bitcoin ATMs, located in everyday places like gas stations, minimarts, and convenience stores, became an easy pipeline for fraudsters to extract life savings from ordinary residents. Bitcoin Depot and its CEO Scott Buchanan, market themself as a company “bringing crypto to the masses,” claiming its kiosks help consumers participate in the digital economy and even serve unbanked communities. But according to the Attorney General’s Office, the reality in Massachusetts was far darker: the kiosks allegedly operated as scam machines, generating enormous revenue through deceptive markups while failing to stop transactions that were overwhelmingly tied to fraud.

At the center of the lawsuit is the claim that Bitcoin Depot knowingly facilitated scam activity on an extraordinary scale. The Attorney General’s Office contacted hundreds of the company’s largest Massachusetts customers, those who had spent $10,000 or more at kiosks between August 2023 and January 2025. What investigators found was staggering. More than 80% of these high-dollar customers were using the kiosks because they were being scammed. These scam-related transactions totaled $10.6 million, representing almost 60% of Bitcoin Depot’s total Massachusetts revenue during that period. In other words, the complaint alleges that the majority of Bitcoin Depot’s Massachusetts business was driven not by legitimate crypto investing or remittances, but by fraud victims being manipulated into feeding cash into Bitcoin Depot machines.

The complaint emphasizes that this was not a surprise to the company. Years earlier, employees had reportedly warned executives that nearly all large transactions were scam-related. Compliance analysts internally estimated that more than 90% of the company’s biggest customers were victims. One analyst even warned leadership that the company was facilitating money laundering at an “extreme volume.” Yet instead of strengthening safeguards, the lawsuit alleges Bitcoin Depot reduced the questions it asked customers, making it less likely to uncover fraud. Rather than intervening, Bitcoin Depot allegedly chose a path of willful ignorance, allowing scams to continue while the company profited.

The warning signs were everywhere. Scam customers in Massachusetts had a median age of 67, meaning the majority were seniors, one of the most vulnerable populations for financial exploitation. More than 70% of scam victims were over 60, and dozens were over 80 years old. Collectively, elderly victims in their 80s alone poured more than $700,000 into the kiosks during the review period. Transactions also showed classic scam red flags: customers visiting multiple kiosks in one day, sending money repeatedly to the same wallet, and transmitting funds to overseas exchanges where U.S. residents are not even supposed to hold accounts. In Massachusetts, more than $1.8 million was traced from kiosks directly to foreign platforms.

Some transactions were so blatantly suspicious that they almost read like satire. The complaint alleges Bitcoin Depot approved purchases under fake names such as “John Wick” and “Chosen One.” In another case, an identity theft victim discovered his stolen information had been used to deposit nearly $29,000 into kiosks in Sharon and Walpole, even though he had never been to Massachusetts.

Despite these glaring red flags, the Attorney General alleges Bitcoin Depot actually increased its daily transaction limits, raising the cap from $15,000 to $25,000 per day. This made scams more efficient: fraudsters could extract larger sums in fewer trips, while Bitcoin Depot collected a larger cut.

And that cut was massive. Bitcoin Depot allegedly imposed markups between 15% and 50% on kiosk transactions, far above the typical online crypto exchange markup of 0.5% to 3%. The company also allegedly used deceptive “drip pricing” tactics. Customers would begin a transaction seeing a Bitcoin price close to the real market rate, only for the displayed price to suddenly jump dramatically higher as hidden spreads were added mid-transaction. In one example cited in the complaint, a Bitcoin price initially displayed around $36,000 was later shown as more than $47,000 within minutes, not because Bitcoin surged, but because Bitcoin Depot inserted its markup after luring the customer in.

Even more troubling, the complaint alleges Bitcoin Depot frequently violated its own supposed fee caps. While its terms suggested spreads would be limited to 23%, investigators found the company exceeded that cap in more than 7,000 transactions. In over 2,300 cases, spreads exceeded 29%, meaning thousands of consumers were charged far more than the company claimed it would take.

When victims realized they had been scammed and pleaded for help, the Attorney General alleges Bitcoin Depot often refused refunds outright. Representatives allegedly told customers there was “nothing we can do,” even though Bitcoin Depot had kept up to 30% of the cash victims inserted into the kiosks through fees and markups. In some cases, Bitcoin Depot offered partial refunds but often capped them at $1,000, far below the thousands of dollars it had collected from a single large transaction. The complaint argues this allowed the company to keep scam-derived profits even while knowing the overwhelming majority of large transactions were fraudulent.

The lawsuit also accuses Bitcoin Depot Inc. of misleading investors. Public filings warned vaguely that kiosks “may be exploited” for fraud, but allegedly omitted the internal reality: scam transactions were not a hypothetical risk, they were a major revenue engine. Employees estimated in 2021 and 2022 that 90% of the biggest customers were scam victims, yet this was not disclosed. With more than 99% of company revenue coming from kiosk transactions in 2024, the Attorney General argues that investors were deprived of critical information about how deeply fraud was embedded in the business.

Attorney General Campbell’s lawsuit seeks sweeping remedies. The state is asking the court to bar Bitcoin Depot from accepting transactions above $10,000 per day without stronger fraud-prevention steps, including live questioning of customers and mandatory refunds of all fees and spreads when fraud is reported with a police report. The complaint also seeks restitution for consumers, refunds of excessive spreads, penalties of $5,000 per violation, and even potential relief for Massachusetts investors who purchased Bitcoin Depot securities without full knowledge of the scam-driven nature of its revenue.

The case is a stark warning about the dark underside of crypto kiosks, which have spread rapidly across the country with minimal oversight. The Attorney General’s Office argues that Bitcoin Depot did not simply fail to stop scams — it allegedly profited from them, removed safeguards, and treated fraud victims as collateral damage in a lucrative business model.

In Massachusetts alone, Bitcoin Depot took in $18.1 million in kiosk revenue during the survey period, with $10.6 million of that tied directly to scam customers. That number represents not just corporate earnings, but life savings lost by seniors, retirees, and vulnerable residents who believed they were handling legitimate transactions, only to discover they had been funneled into irreversible fraud.

Read the complaint here

This lawsuit is not just about Bitcoin Depot. It is about whether companies operating in the shadows of new financial technology will be allowed to build profits by turning consumer trust into a scam pipeline, or whether Massachusetts will set a precedent that innovation does not excuse deception, exploitation, or cruelty.

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