Crypto ATMs or Scam Machines?

How an Iowan Got Caught in the Middle

Source: CNN Interactive: “Crypto Crime Scene” (October 14, 2025)

Across the U.S., Americans are losing hundreds of millions of dollars to scams involving crypto ATMs — machines that let users buy digital currency with cash. CNN’s investigation found that the companies running these machines are profiting even from fraudulent transactions, marking up prices by 20–30% or more while often refusing refunds or resisting law enforcement efforts to recover stolen funds.

Federal authorities say the scams are rising fast: the FBI estimates $240 million in losses during the first half of 2025 alone, double last year’s rate. Elderly and retired victims are disproportionately targeted.

The Iowa Connection: Shelby “Gus” Cason’s Story

In Coggon, Iowa, 69-year-old Shelby “Gus” Cason received a frightening call from someone claiming his bank account was compromised and that he faced arrest unless he acted immediately. Under duress — and still recovering from a stroke — Cason withdrew $15,000 and deposited it into a Bitcoin Depot ATM at a local liquor store, following the scammer’s step-by-step instructions.

When he realized it was a scam, Cason contacted the Linn County Sheriff’s Office, which seized the cash from the machine. But Bitcoin Depot fought back in court, claiming Cason had “authorized” the transaction under its terms of service.

The case reached the Iowa Supreme Court, which sided with Bitcoin Depot, ruling the company was not liable because Cason had agreed to use the ATM to send funds — even if he was deceived into doing so. Cason never recovered his money and later filed a civil lawsuit against the company. “I got screwed,” he said. “Everyone made money but me.”

Profits Over Protection

CNN’s review of 700+ criminal cases and complaints found that major operators like Bitcoin Depot, CoinFlip, and Athena Bitcoin profit from both legitimate and fraudulent transactions. Internal documents and former employees describe an industry reluctant to curb scams for fear of losing revenue.

In Iowa, Attorney General Brenna Bird sued Bitcoin Depot, alleging that more than half of all deposits into its Iowa machines—over $7 million—came from scams between 2021 and 2024. A separate case claimed CoinFlip’s top 20 users in Iowa were all scam victims.

Regulators and Lawmakers Push Back

Despite mounting losses, industry lobbyists have fought regulations that would cap daily transactions or require automatic refunds.
In 18 states, new or proposed crypto ATM laws were softened after lobbying. Companies helped draft some bills themselves, weakening refund obligations and raising transaction limits.

Law enforcement agencies across the country — including Iowa’s — have grown increasingly frustrated. “If they truly care and they’re running a legitimate business, they’d do something to try and protect these people,” said Chad Colston of the Linn County Sheriff’s Office, who handled Cason’s case.

Bigger Picture: A System Built for Exploitation

CNN found that much of the money flowing through U.S. crypto ATMs ends up in overseas exchanges in countries with weak anti-money laundering laws. While companies insist that scams make up only a small share of transactions, regulators and prosecutors say the industry’s design — fast, anonymous, and high-fee — makes it ideal for criminals.

Victims like Cason are left empty-handed while companies pocket thousands per transaction. As authorities and state regulators call for tighter controls, the question remains whether the federal government will step in before more Americans lose their savings.