The District of Columbia’s Attorney General has filed a lawsuit against a major crypto ATM operator, bringing intense scrutiny to the company’s business practices in Washington, D.C. This legal action alleges violations of the Consumer Protection Procedures Act as well as laws designed to protect vulnerable adults and seniors from financial exploitation.

The complaint accuses the operator of charging hidden fees as high as 26 percent, which were incorporated into quoted exchange rates and not itemized for consumers. This made it difficult for users to understand the true cost of converting cash to cryptocurrency at the kiosks. Moreover, the lawsuit claims that the company’s policies and refund practices failed to adequately safeguard customers from scams. Many elderly consumers reportedly fell victim to schemes facilitated by these crypto ATMs, with a median age of 71 and typical losses reaching $8,000 per transaction.

The Attorney General argues that the operator relied on ineffective warnings and procedures, such as simple on-screen prompts and checkboxes, that failed to prevent recurring fraud. Notably, even when fraud indicators were present, deposits to known scam wallets proceeded without intervention. When victims sought refunds, they were frequently told that all transactions were final and, if any refunds were offered, they were insufficient to cover the full losses.

Additionally, the company allegedly operated without acquiring the required money-transmission license in Washington, D.C., making it possible to transmit funds to third-party wallets without regulatory oversight.

Federal and state regulators are signaling increased attention toward consumer protections at crypto kiosks and ATMs, especially concerning fee transparency, anti-fraud measures, refund protocols, and compliance with licensing laws. Companies in this sector should anticipate further regulatory action and may need to strengthen their compliance procedures accordingly. This lawsuit underscores the urgency for operators to prioritize consumer protection and transparency, particularly to safeguard vulnerable populations against exploitation in the rapidly evolving crypto landscape.