Chris Ryan, Head of Legal at Bitcoin Depot, stated that law enforcement agencies in the U.S. are overstepping their authority and may be breaking the law by using force to seize cash from Bitcoin ATMs. He asserted that the seized money belongs to Bitcoin Depot and that the police must be held accountable for compensating the damaged machines.
Destruction and damage
Ryan explained that the police, in an effort to help those who have been scammed, inadvertently create new victims out of the company. For example, in Texas, authorities used specialized tools to take $32,000 from a Bitcoin Depot machine, causing complete damage and requiring a replacement machine (a machine that costs $14,000). According to Scott Buchanan, COO of Bitcoin Depot, in most cases of "physical destruction," the machines are completely ruined.
Bitcoin Depot is always willing to unlock the machine if there is a request to seize money from authorities. However, if their property is damaged, the company will seek compensation, but cities often lack adequate resources to provide compensation.
Legal confusion and the problem of fraud
The issue arises from a misunderstanding of the nature of the transaction. When customers deposit money into #ATMBitcoin , Bitcoin Depot sells Bitcoin to the users, and the users provide a wallet address to receive Bitcoin. Scammers often provide their own wallet address, causing the customer's cryptocurrency to be stolen. However, the police often consider the cash in the machine as stolen money, rather than Bitcoin that has already been transferred.
Ryan stated that Bitcoin Depot deeply regrets the victims of fraud, but the company still has the right to keep the cash in the machine, as the transaction was completed when Bitcoin was transferred to the user's wallet. The Iowa Supreme Court in two cases this year ruled that Bitcoin Depot has ownership rights over the victims' cash, as per the terms of service, the depositors must confirm they are the owners of the digital wallet receiving Bitcoin.
According to an FBI report, Americans lost at least $247 million through cryptocurrency ATMs in 2024 due to fraud, a 31% increase from 2023. Bitcoin Depot stated that they cooperate with local law enforcement and cryptocurrency analysis companies like Elliptic to track stolen assets, as well as having their own team to assist in investigations.
Ryan emphasized that such "property destruction" is not the norm, and "they (the police) often do not really understand how cryptocurrency works, so we are trying our best to help them, on top of all our other responsibilities." #anhbacong