Despite efforts to assist consumers allegedly scammed at cryptocurrency ATMs, law enforcement agencies are increasingly accused by Bitcoin Depot of overstepping their authority when seizing funds from the company’s machines, often resorting to destructive methods.

“You’ve got these rogue law enforcement officers thinking that they’re doing the right things by these consumers. What they’re actually doing is creating another victim, which is us, with the damage of our property and seizing of our funds.”

A notable incident in Texas recently saw authorities use power tools to retrieve $32,000 from a Bitcoin Depot kiosk, resulting in complete machine replacement costs of approximately $14,000. Company leadership maintains cash inserted via Bitcoin ATMs legally belongs to the provider until the transaction is finalized.

Facing approximately $247 million in losses reported in 2024 through crypto kiosks, Bitcoin Depot contends that law enforcement seizures of pre-transaction cash funds are inappropriate and damaging. While the company partners with authorities to trace scammed victims’ crypto, officials assert their right to retain customer funds.

The company cites evolving legal interpretations supporting their position, including a recent ruling by the Iowa Supreme Court. However, reconciliation with law enforcement often involves extended legal disputes regarding the legitimacy of fund retention.

Simultaneously, prominent security organizations like the FTC and IC3 issue widespread warnings about the risks associated with cryptocurrency, particularly when interacting with ATMs and unregulated sales. Navigating this complex landscape necessitates clearer regulatory frameworks and improved consumer education about irreversible crypto transactions.