On March 2, S and P Solutions, the company that operates Bitcoin of America ATM kiosks, as well as its founder Sonny Meraban, his father and the company's CEO Sonny Meraban, and attorney William Suriano were indicted by a Cuyahoga County grand jury.
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One of the accusations they faced is license violation and lack of money laundering protection, which created auspicious conditions for scammers, especially those specializing in robocalls, romance scams and impersonation of law enforcement officers.
Prosecutor Andrew Rogalski explained at a press conference one of the fraud strategies used by perpetrators who had relied on the Bitcoin of America ATMs. According to Rogalski, the scammers would "direct the victims, which are often elderly or otherwise vulnerable, to specifically go to Bitcoin of American ATMs, take money that they’ve withdrawn from their savings accounts or 401Ks."
Read also: UK watchdog urges crypto ATMs to shut down
The company has also been charged with conspiracy, engaging in corrupt activities, money laundering, receiving stolen property, taxation, record falsification, and possession of criminal tools. In addition, investigators have revealed that Bitcoin of America retained a hidden fee of 20% on every transaction.
Meanwhile, some members of the Bitcoin community expressed confusion about the potential of licensed cryptocurrency ATMs to be used for fraud. For instance, some of the Bitcoin Forum users are afraid that anti-money laundering is often limited to the size of deposits and withdrawals made at a time. Others believe that informing people about possible scams is more effective for their protection than regulations, as such scams can only be avoided if victims are aware of different types of attacks.
Read also: UK watchdog urges crypto ATMs to shut down
Although 52 ATMs of Bitcoin of America have been seized, there are over 2,500 ATMs in more than 250 locations nationwide, according to the company's official website.
Prior to the seizure of its crypto kiosks, Bitcoin of America had added a new feature for bill payments in the ATMs located in Texas and Illinois.
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"Bitcoin of America uses an anti-money laundering monitor system and advanced technologies, which make transactions fast and easy. With us, you get the best rate in the market and all transactions made by our platform are fast and safe," the company describes itself in the sponsored post on the informational platform CryptoSlate.
