Sebastian Sinclair

Authorities in McLennan County have settled a lawsuit with Lux Vending, operating as Bitcoin Depot, following the wrongful seizure of $15,000 from one of its bitcoin ATMs.&nbsp;



The lawsuit was dismissed after the county acknowledged the funds were improperly confiscated following a scam that targeted an 82-year-old Crawford woman, local media reported Thursday.&nbsp;



The scam was reported by the elderly victim who was deceived into withdrawing $15,000 in cash and depositing it into a Bitcoin machine. This reportedly followed her falling victim to a ransomware attack initiated by a malicious email link.



Legal action had originally been filed against county investigators for allegedly violating due process. They had obtained a warrant to seize the funds from a Bitcoin Depot kiosk located at a Sunoco store.



The lawsuit also aimed to have the court recognize Bitcoin Depot as the lawful owner of the seized money.



McLennan County Sheriff Parnell McNamara, who had previously stood by the actions of his officers, declined to comment on the lawsuit&#8217;s resolution or on Judge Scott Felton&#8217;s admission that the funds had been seized erroneously, <a href="https://www.kwtx.com/2023/10/12/mclennan-county-resolves-bitcoin-settlement-after-admitting-funds-seized-error/">KWTX News</a> reported.



Blockworks has reached out to the sheriff’s department but has received no response.



Sheriff McNamara had previously likened the situation to routine law enforcement procedures for recovering stolen property and returning it to rightful owners.



In a letter to Bitcoin Depot, Judge Felton clarified that the initial seizure was based on the mistaken belief that the funds belonged solely to the elderly victim.&nbsp;



Judge Felton also acknowledged county officials were not aware of Bitcoin Depot&#8217;s terms and conditions when the money was returned to the elderly woman.



An attorney representing McLennan County revealed the settlement involved no payments to Bitcoin Depot, per the reports. The company had sought official acknowledgment that it was not involved in the scam, which was the work of a third-party international fraudster.



McLennan County, located in central Texas, is part of a wider network of bitcoin ATMs operated by Bitcoin Depot. As of October, the company has <a href="https://howmanybitcoinatms.com/">6,625</a> different machines spread across the US, representing a 9.8% share of the total market, data shows.



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Texas county settles lawsuit over wrongful seizure of $15K from bitcoin ATM

Ben Strack

<div id="highlights-block_630f87177d7bd" class="highlights">
 <ul>
 <li>Crypto ATM operator’s transaction volumes are not correlated to bitcoin’s price, CEO says</li>
 <li>Bitcoin Depot seeks New York license, a state it thinks can support several thousand more machines</li>
 </ul>
 
</div>



The largest crypto ATM operator, which revealed its intent to go public last week, sees opportunities to acquire smaller players in the space and expand internationally following its planned listing on the Nasdaq.



Bitcoin Depot CEO Brandon Mintz told Blockworks he expects the public listing — via a pending combination with special purpose acquisition company GSR II Meteora Acquisition Corp. — could occur in the first quarter of next year.&nbsp;



Founded in 2016, the Atlanta-based company offers a way to convert cash into bitcoin, ether and litecoin via its roughly 7,000 ATMs in the US and Canada. &nbsp;



Bitcoin Depot’s transaction volumes have not historically been correlated to the price of crypto or seen significant impacts based on bull or bear market cycles, the executive added. It eclipsed an all-time high $160 million of transaction volumes during the second quarter of 2022, company data shows, despite the price of bitcoin plummeting to around $20,000.&nbsp;&nbsp;&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="591" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Bitcoin-Depot-Transaction-Volumes-1024x591.jpg" alt="" class="wp-image-29725" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Bitcoin-Depot-Transaction-Volumes-1024x591.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Bitcoin-Depot-Transaction-Volumes-1024x591.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Bitcoin-Depot-Transaction-Volumes-1024x591.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Bitcoin-Depot-Transaction-Volumes-1024x591.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Bitcoin-Depot-Transaction-Volumes-1024x591.jpg?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Bitcoin-Depot-Transaction-Volumes-1024x591.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Bitcoin-Depot-Transaction-Volumes-1024x591.jpg?w=453 453w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Bitcoin-Depot-Transaction-Volumes-1024x591.jpg?w=380 380w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Bitcoin-Depot-Transaction-Volumes-1024x591.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Bitcoin-Depot-Transaction-Volumes-1024x591.jpg?w=50 50w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></figure>



The company has generated $623 million of revenue and $6 million of net income in the previous 12 months, as of June 30.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Even if the [bitcoin] price drops 10% tomorrow, we don’t expect to see a lot of change,” Mintz said.</blockquote>



“We have grown consistently over time, so we think with that growth and the ability to elevate our profile, attract talent and acquire companies, it’s the perfect time to go public,” he added.



<h3 class="wp-block-heading">The crypto ATM landscape</h3>



There are 38,667 crypto ATMs in the world, according to <a href="https://coinatmradar.com" target="_blank" rel="noreferrer noopener">Coin ATM Radar</a>. Bitcoin Depot is the largest crypto ATM operator — accounting for roughly 18% of all crypto ATMs — followed by CoinCloud and CoinFlip, which have about 5,000 and 4,000 ATMs, respectively.&nbsp;



The top 10 operators run about 70% of the world’s crypto ATMs, though there are 257 operators in the US and 59 in Canada, Coin ATM Radar data indicates. The company plans to acquire some of the smaller players in North America, Mintz said.&nbsp;



“We think a lot of them would be interested in taking advantage of our economies of scale, our retail relationships, our hardware relationships and our strong management team to take them to the next level with us,” the CEO said.



The company launched <a href="https://bitcoindepot.com/bd-checkout/" target="_blank" rel="noreferrer noopener">BDCheckout</a> in June, allowing customers to load cash into their Bitcoin Depot digital wallet at more than 8,000 retail locations, where they can then purchase bitcoin. The news followed its partnership last year with gas station and convenience store chain Circle K.



<h3 class="wp-block-heading">Growth opportunities&nbsp;</h3>



After the US and Canada, which have 34,223 and 2,573 crypto ATMs, respectively, Spain’s 255 machines is third-highest.


<div class="wp-block-image">
<figure class="alignright size-full"><img loading="lazy" decoding="async" width="300" height="450" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/08/2022-08-31-Brandon-Mintz-CEO-of-Bitcoin-Depot.png" alt="" class="wp-image-29787" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/08/2022-08-31-Brandon-Mintz-CEO-of-Bitcoin-Depot.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/2022-08-31-Brandon-Mintz-CEO-of-Bitcoin-Depot.png?w=200 200w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/2022-08-31-Brandon-Mintz-CEO-of-Bitcoin-Depot.png?w=171 171w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/2022-08-31-Brandon-Mintz-CEO-of-Bitcoin-Depot.png?w=174 174w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/2022-08-31-Brandon-Mintz-CEO-of-Bitcoin-Depot.png?w=146 146w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/2022-08-31-Brandon-Mintz-CEO-of-Bitcoin-Depot.png?w=53 53w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/2022-08-31-Brandon-Mintz-CEO-of-Bitcoin-Depot.png?w=33 33w" sizes="auto, (max-width: 300px) 100vw, 300px" /><figcaption>Brandon Mintz</figcaption></figure></div>


The drop-off represents a large opportunity to expand Bitcoin Depot’s footprint to other countries, Mintz said. The company is doing market research and has not yet committed to any specific regions.&nbsp;



In North America, Bitcoin Depot currently operates ATMs in 47 states and nine Canadian provinces. It is working with New York’s Department of Financial Services to get its BitLicense — the requirement for it to operate in the state.&nbsp;



Mintz said he hopes to receive the New York license in the next few months in order to expand to a state that is ripe for growth. New York has about 200 crypto ATMs, while Florida, which has a similar population, has more than 3,000.



Mintz said the recent bankruptcies of Voyager Digital and Celsius could spur investors to transact with crypto through Bitcoin Depot. He also pointed to Coinbase revealing in <a href="https://d18rn0p25nwr6d.cloudfront.net/CIK-0001679788/89c60d81-41a2-4a3c-86fb-b4067ab1016c.pdf" target="_blank" rel="noreferrer noopener">a May regulatory filing</a> that if the company ever declared bankruptcy, its customers could be treated as “general unsecured creditors.”&nbsp;



“I think there’s more and more focus on the phrase, ‘not your keys, not your coins,’” Mintz said. “So people are going to be looking more and more for unhosted, non-custodial wallets where they are not subject to any risk by a third party.”



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Largest Crypto ATM Operator Eyes Acquisitions, Global Expansion

Morgan Chittum

<div id="highlights-block_622b8988ee2b2" class="highlights">
 <ul>
 <li>There are 80 bitcoin ATMs or tellers in the UK, per data from Coin ATM Radar</li>
 <li>The FCA said “people should be prepared to lose all their money” if they invest in crypto assets because they are unregulated</li>
 </ul>
 
</div>



The Financial Conduct Authority (FCA) said on Friday that all crypto ATMs are prohibited from operating in the UK.



The regulator “warned” crypto ATM operators to “shut their machines down” or “face enforcement action,” according to a Friday <a href="https://www.fca.org.uk/news/news-stories/warning-illegal-crypto-atms-operating-uk" target="_blank" rel="noreferrer noopener">statement</a>.



<a href="https://coinatmradar.com/country/225/bitcoin-atm-united-kingdom/" target="_blank" rel="noreferrer noopener">Data from Coin ATM Radar</a> shows 80 bitcoin ATMs or tellers operate in the UK, none of which has been approved to offer crypto ATM services.



“We regularly warn consumers that crypto assets are unregulated and high-risk, which means people are very unlikely to have any protection if things go wrong, so people should be prepared to lose all their money if they choose to invest in them,” the FCA said in its announcement.



The news follows UK tax watchdog Her Majesty’s Revenue and Customs&#8217; confiscation <a href="https://cms.blockworks.co/uk-tax-watchdog-seizes-nfts-in-1-9m-fraud-investigation/" target="_blank" rel="noreferrer noopener">of three NFTs</a> last month in an almost $2 million fraud probe. 



Three people were arrested on suspicion of fraud as a result of the investigation. Suspects used virtual private networks (VPNs), stolen identities, fake addresses and unregistered phones to try to hide illegal activities.



This was the country&#8217;s first seizure of a blockchain-based digital collectible.



Nick Sharp, deputy director of economic crime at Her Majesty’s Revenue and Customs, <a href="https://www.bbc.com/news/business-60369879" target="_blank" rel="noreferrer noopener">told the BBC</a> that the authority is “constantly adapting to new technology to ensure [they] keep pace with how criminals and evaders look to conceal their assets.”



The use of bitcoin ATMs has come under increasing scrutiny elsewhere in the world as well. New licensing guidelines from the ​​Monetary Authority of Singapore (MAS) forced ATM operators there <a href="https://cms.blockworks.co/singapore-bitcoin-atms-shutting-down-following-central-banks-guidelines/" target="_blank" rel="noreferrer noopener">to shut down</a> in January.



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Bitcoin ATMs Illegal in the UK, Regulator Says

Casey Wagner

<div id="highlights-block_61faae21d00c4" class="highlights">
 <ul>
 <li>El Salvador has recruited US-based crypto wallet provider to address Chivo concerns</li>
 <li>The partnership comes after months of reports of fraud and difficulties with the application</li>
 </ul>
 
</div>



Nearly five months into the uneven rollout of El Salvador’s experiment to make bitcoin the country’s currency, the Central American nation has tapped an institutional crypto wallet provider to improve its in-house Chivo Wallet.



Chivo launched with a host of glitches, <a href="https://cms.blockworks.co/fraud-funding-woes-and-a-president-who-wont-quit-el-salvadors-bitcoin-experiment/" target="_blank" rel="noreferrer noopener">citizens said</a>. The administration has since tapped AlphaPoint to integrate with Chivo in an effort to make the wallet more stable and support instantaneous bitcoin transactions.



Igor Telyatnikov, co-founder and CEO of AlphaPoint, told Blockworks the company was chosen to “deliver the scale and stability required to enable an application at the size of the Chivo wallet.”



“An improved lightning (a bitcoin scaling solution) integration, application responsiveness and enhanced administrative tools for increasing customer service response time are elements delivered in the implementation,” Telyatnikov told Blockworks.&nbsp;



Over 4 million Salvadorans currently use the Chivo app, <meta charset="utf-8">Vadim Telyatnikov, co-founder and chairman of AlphaPoint said. 



The implementation comes after months of complaints. When it launched in September, the app did not require photo identification, only a citizen’s date of birth and national identity card number (similar to a social security number), resulting in fraud. Citizens and business owners also expressed concern with the amount of time it took to access funds, according to <a href="https://www.elsalvador.com/noticias/nacional/chivo-wallet-fraudes/889706/2021/" target="_blank" rel="noreferrer noopener">local reports</a>.



As a result, relatively few businesses now accept bitcoin, citizens say.&nbsp;



“The only businesses that are accepting bitcoin readily, aside from a few, are big corporations like Starbucks and McDonald’s that have tech teams to implement it,” said Alexandra Dumitru, a cryptocurrency consultant and advocate living in El Salvador. “It’s a pretty small percentage of businesses in the country, especially considering how many small tiendas [convenience stores] and whatnot there are.”



Problems aside, El Salvador is still the only country in the world to accept bitcoin as legal tender. Even if only large corporations are playing along, that’s still a significant development, the AlphaPoint team said.&nbsp;



“Notably, for the first time anywhere in the world, major chains such as Super Selectos, McDonalds, Starbucks, Wendy’s, Subway, Walmart and government offices are already accepting Bitcoin with Chivo,” Vadim Telyatnikov, said. “Adoption on such a broad scale has not been achieved yet anywhere else in the world.” 



Meanwhile, El Salvador officials are working to roll out an additional 1,500 bitcoin ATMs across the country with the aim of easing adoption.&nbsp;



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