Massachusetts Attorney General Andrea Campbell has filed a sweeping consumer protection lawsuit against Bitcoin Depot, the nation's largest Bitcoin ATM operator, alleging the company knowingly facilitated over $10.6 million in scam transactions while charging hidden fees that exceeded its own disclosed limits.
The lawsuit, filed February 3, 2026 in Suffolk Superior Court, contains five counts including an extraordinary securities fraud claim against parent company Bitcoin Depot Inc. for allegedly hiding the true extent of scam activity from investors.
Case: Commonwealth of Massachusetts v. Bitcoin Depot Operating LLC, Bitcoin Depot Inc.
Court: Suffolk Superior Court, Massachusetts
Filed: February 3, 2026
Legal Basis: G.L. c. 93A (Massachusetts Consumer Protection Act)
Key Findings from AG Investigation:
- 83% of customers spending $10,000+ were scam victims
- $10.6 million in scam-related revenue (~60% of MA business)
- Fewer than 10 legitimate large customers found
- Company's own 2021 estimate: 90% of large transactions were scams
- 7,000+ transactions exceeded disclosed 23% fee cap
The Numbers: A Business Built on Scams
The complaint paints a damning picture of Bitcoin Depot's Massachusetts operations. Between August 2023 and January 2025, the Attorney General's Office contacted hundreds of Bitcoin Depot's largest customers and found that the overwhelming majority were fraud victims.
Of 552 "Large Customers" who spent $10,000 or more at Bitcoin Depot kiosks, the AG's office confirmed 458 were scam victims. After contacting hundreds of these customers, investigators found fewer than ten who may have been using the kiosks for legitimate purposes.
Five Counts Against Bitcoin Depot
Alleged Violations of Massachusetts Consumer Protection Law
The Drip Pricing Scheme
The complaint describes a deceptive pricing practice where Bitcoin Depot lured customers with competitive-looking prices, then switched to much higher prices mid-transaction.
"In one transaction conducted by the Attorney General's Office in November of 2023, the price of one Bitcoin was initially listed as $36,453.70 on Bitcoin Depot's kiosk. This was approximately the trading price of Bitcoin on the spot market. However, by the time the investigator clicked through the screens and put money into the machine five minutes later, the displayed price of Bitcoin had changed and was listed on the kiosk display screen as $47,562.61 for one Bitcoin."
- From Massachusetts AG complaint filing
The complaint alleges this was not due to market movement, but rather a pre-planned marketing tactic to apply a hidden "spread" of 15-50% after the customer was already engaged in the transaction.
Elderly Victims Targeted
The lawsuit reveals disturbing demographics about Bitcoin Depot's scam victims in Massachusetts:
More than 340 of the 458 confirmed scam victims were 60 years old or older. The complaint notes that more than 40 victims were over 80 years old, collectively losing over $700,000 at Bitcoin Depot kiosks.
Company Knew - And Reduced Oversight
Perhaps the most damning allegation is that Bitcoin Depot knew about the overwhelming fraud rates and chose to reduce its fraud detection efforts rather than address the problem.
Internal Knowledge Timeline:
- 2021: EDD Team employees determined 90%+ of large transaction customers were scam victims
- 2021: Compliance analyst warned company was facilitating money laundering at "extreme volume"
- Late 2021: Company changed KYC/AML process to ask fewer questions, finding fewer scams
- 2023: Internal metrics still showed 13-16% of volume was scam-related
- 2023-2025: Company raised daily limit from $15,000 to $25,000
- Late 2024: Average spread increased to over 29% (from under 20% in early 2022)
According to the complaint, when employees froze suspicious accounts, supervisors overruled them, allowing likely scam victims to continue sending money to scammers while Bitcoin Depot continued collecting fees.
Securities Fraud Against Investors
Count V of the complaint uniquely targets Bitcoin Depot Inc. (the publicly traded parent company) for allegedly deceiving investors. While the company warned in SEC filings that its machines "may be exploited" for fraud, it failed to disclose that:
- Employees had estimated 90% of large transactions were fraud-related since 2021
- Internal metrics showed 13-16% of all transaction volume was scam-related
- Scam transactions were a "major revenue center" of the company
- In 2024, more than 99% of Bitcoin Depot Inc.'s revenue came from kiosk transactions
The AG alleges this amounted to telling investors fraud was merely a "risk" when it was actually a widespread, ongoing reality that materially affected the business.
Relief Sought
The Massachusetts AG is seeking:
- Injunction preventing transactions over $10,000/day without enhanced fraud prevention
- Full refund of all fees from fraud-related transactions
- Refund of all spread charges exceeding 23%
- Refund of all drip-priced spreads
- Securities buyback option for Massachusetts investors
- $5,000 civil penalty per violation
Pattern of State Enforcement
Massachusetts joins a growing list of states taking enforcement action against Bitcoin Depot:
Bitcoin Depot Enforcement Actions:
- Iowa (Feb 2025): AG lawsuit alleging 98% scam rate, $7.2M in losses
- Missouri (Jan 2026): AG Civil Investigative Demand
- Minnesota (2024): Commerce Department charges
- Maine (2024): License denial, consent agreement
- Georgia (2024): Data breach affecting 27,000+ users
- Florida/SC: Pending class action lawsuits
What Consumers Should Know
If you are considering using a Bitcoin ATM in Massachusetts or elsewhere:
- Verify all fees before transacting - Ask for a complete breakdown and compare to the displayed Bitcoin price
- Never send Bitcoin to unknown parties - Government agencies, utilities, and legitimate businesses never demand payment via Bitcoin ATM
- Be suspicious of urgency - Scammers create artificial time pressure to prevent victims from thinking clearly
- Elderly relatives are at high risk - Talk to family members over 60 about Bitcoin ATM scams
- Report suspicious activity - Contact your state attorney general's office if you encounter fraud
Massachusetts consumers who believe they were victims of Bitcoin Depot fraud can contact the AG's Consumer Protection Division.
Industry Perspective: One Company's Alleged Actions
It is important to note that the allegations in this lawsuit are against one specific operator and do not reflect the practices of the broader Bitcoin ATM industry. Bitcoin ATMs remain one of the fastest-growing and most innovative developments in modern finance, providing millions of Americans with convenient cash access to digital assets.
For many unbanked and underbanked communities, Bitcoin ATMs represent a critical bridge to the digital economy. The vast majority of Bitcoin ATM users are legitimate customers seeking easy, accessible ways to buy and sell cryptocurrency—whether for remittances, savings, or participation in the growing digital asset ecosystem.
Not All Operators Are the Same:
Some Bitcoin ATM operators take vastly different approaches to consumer protection and fraud prevention. Many have implemented robust scam detection systems, real-time intervention protocols, and transparent fee structures. When choosing a Bitcoin ATM, research matters.
At BitcoinATM.news, we've developed a Trust Rating System to help consumers evaluate operators based on their regulatory history, compliance track record, and consumer protection practices. Our ratings consider:
- Regulatory compliance – State licenses, MSB registration, enforcement history
- Consumer protection record – Complaints, litigation, fraud prevention measures
- Transparency – Fee disclosure, refund policies, customer support
- Years in operation – Track record and industry experience
Before using any Bitcoin ATM, we encourage consumers to check our operator directory and review trust ratings. Making an informed choice about which operator to use is one of the best ways to protect yourself while still enjoying the benefits of this innovative technology.