Her cash was still inside the bitcoin ATM. The court gave it away

Carrie Carlson’s money never actually left. The stack of cash was still sitting in the cassette of a bitcoin machine at a gas station in Cedar Rapids, Iowa, when deputies from the Linn County Sheriff’s Office seized it. In February 2024 a man claiming to be from the computer help service Geek Squad had called her and told her to rescue her money from “compromised” accounts by moving it into a digital wallet. She fed $14,100 into the machine and sent the bitcoin to an address he read out.

The money was found, and everyone knew whose it was. Yet in May 2025 the Iowa Supreme Court ruled that the cash should go not to Carlson but to the machine’s owner, Bitcoin Depot. The deal had gone through, and the company had no way of knowing she was being coerced. The court likened the scam warning on the kiosk screen to a disclaimer on product packaging: it speaks to a general risk, not to the fact that this particular woman was acting under pressure.

Iowa’s prosecutors claim that of every $100 that passed through Bitcoin Depot’s machines in the state, $98 came from scam victims. A year after the ruling, not one of the company’s machines was running. In 2026 the United States started dismantling bitcoin ATMs: three states have banned them outright, cities are evicting them from stores one after another, and the largest operator has gone bankrupt. Here is the file on a machine that began as a toy for enthusiasts in a coffee shop and grew into phone scammers’ favorite cash register.

A candy bar from a vending machine

The world’s first bitcoin ATM went live on October 29, 2013, in the Waves coffee house in downtown Vancouver. It was run by the American company Robocoin and the local Bitcoiniacs, and the pitch was easy to grasp: buy cryptocurrency in a couple of minutes with no bank and no exchange, the way you buy a candy bar from a vending machine. It was stricter than today’s machines, though: it scanned the customer’s palm and ID and took no more than $3,000 a day. On day one it handled 81 exchanges worth $10,000 . For about a third of those customers, it was their first bitcoin ever.

From there the machines moved into gas stations and convenience stores. The model settled quickly: the store collects rent, the operator takes a cut of every transaction, and the customer pays for not having to talk to anyone. By the end of 2025 the US had 30,617 bitcoin ATMs , more than the rest of the world combined.

A cash register with no complaints desk

The machine is simpler than a coffee maker. You hold a QR code with a crypto wallet address up to the scanner, feed in bills, and within minutes the bitcoin goes to that address. There is no cancel button. A bank transfer can be disputed, a card payment charged back, and a bank has a fraud team that sometimes manages to stop the money. The box at the gas station has a screen, a bill slot and a support number.

That convenience is expensive. Iowa’s attorney general alleges that Bitcoin Depot took 23% of the amount and its rival CoinFlip 21%. The District of Columbia’s lawsuit against the operator Athena Bitcoin describes hidden fees of up to 26% . Major crypto exchanges charge buyers a small fraction of that.

For an honest customer it is just a very pricey exchange booth. For a scammer it is ideal: the victim doesn’t need to understand crypto, install an app or open an account. All it takes is withdrawing cash, driving to the nearest store and holding up a phone with the image someone sent.

A call from “the police”

The scripts vary, the ending doesn’t. In October 2026 the TV station WRAL reported on a woman in Johnston County, North Carolina. Callers posing as local police told her that a deposit through a crypto kiosk would secure her “release.” She fed thousands of dollars into a machine at a gas station. When the callers demanded another $4,000, she said she had nothing left. The line went dead, and she realized she had handed over nearly all her savings.

A 63-year-old woman in Allen County, Ohio, saw a pop-up in 2024 warning that her computer had been hacked. She called the number on the screen and reached “Microsoft,” which told her to convert cash to crypto at a kiosk. She was lucky: investigators at the state’s Bureau of Criminal Investigation traced and froze the funds, and in October 2026 returned all $15,300 to her . Since 2024 the bureau has helped with 309 similar cases involving $5.6 million, close to $19,000 per victim on average.

The bigger picture comes from an FBI public service announcement on 2025. The bureau counts complaints in which a kiosk was used in the scheme, so some of that money may have moved in other ways too.

People over 50 didn’t need to understand anything about crypto: as the FBI describes it, scammers walk victims step by step through withdrawing cash, finding a kiosk and depositing the money.

How much of the money is honest

The core argument about these machines goes like this: is it an exchange booth that scammers sometimes use, or a scammers’ till that honest people sometimes use? Prosecutors who have tried to run the numbers lean toward the second.

Iowa’s prosecutors arrived at that $98 out of every $100 at Bitcoin Depot in the lawsuits that the state’s attorney general, Brenna Bird, filed against Bitcoin Depot and CoinFlip in February 2025. By the prosecutors’ count, Iowans lost more than $20 million through their machines in under three years. At CoinFlip, by the same count , scam victims’ money made up almost $95 of every $100.

In the District of Columbia, prosecutors sketched the typical victim of the operator Athena Bitcoin. Half of them were older than 71, and half of these transactions cost them more than $8,000 a time. Scams, the prosecutors say, brought in 93% of the money deposited in those machines during their first five months. In Albuquerque, city councilor Stephanie Telles put her city’s figure at about 90% .

An important caveat: these are the prosecution’s numbers, and no court has confirmed them yet. The operators push back. CoinFlip said it screens transfers with blockchain analytics, shows warnings and runs education campaigns. Circle K, whose stores hosted Bitcoin Depot machines, told reporters that scams begin outside its stores. Its clerks saw something else. ICIJ and CNN spoke with 17 Circle K employees who watched scams unfold during their shifts and sometimes tried to stop them. Debbie Joy, an assistant manager in Port Orange, Florida, even received an award for interrupting one in progress. The chain’s rule, as she put it: “It’s not our machine, it’s not our problem.” And according to police reports, sometimes the clerks themselves were the victims, talked into taking cash out of the store safe and feeding it into the machine.

Refund, ban, or leave it alone

The first response from states is to make operators pay people back. Arizona’s law has been in force since September 26, 2025: if a new customer reports a scam within 30 days, the operator refunds the full amount plus fees. By August 2026, 35 people had recovered $171,332 , roughly $4,900 each. A similar law took effect in Alabama on October 1, 2026 : new customers get everything back with fees, existing ones half. North Carolina passed a law with limits too, but it only kicks in on January 1, 2027. It comes too late for the woman in Johnston County.

The second response is a ban. Indiana became the first state to outlaw crypto kiosks entirely, even though the bill started out as a modest set of rules for operators. In Tennessee, installing a kiosk is now a criminal offense, and a federal judge declined to block the law when CoinFlip sued. Minnesota ordered its switched-off machines hauled out of stores by the end of the year. Cities followed: Albuquerque gave operators 45 days to remove them, and the city council in St. Paul voted for a ban as well.

Where a state stays silent, courts settle the fight. And there, as Carlson’s case showed, operators stand on firmer ground.

The machine is gone, the phone remains

In May 2026 Bitcoin Depot, the world’s largest operator of these machines, filed for bankruptcy and took all 9,700 of its kiosks offline . CEO Alex Holmes blamed ever tougher requirements: transaction limits and, in some states, outright bans. The company didn’t try to save the business; it is being wound down and sold off. In the first half of the year, the number of bitcoin ATMs in the US fell from 30,617 to 20,237. The country lost a third of its network and accounted for 96% of the decline worldwide.

The fraud itself didn’t go anywhere. Drew Evans, superintendent of Minnesota’s Bureau of Criminal Apprehension, said plainly that the ban will not eliminate fraud, because criminals keep looking for new ways to get at other people’s money. Opponents of the ban in St. Paul warned of something else: the city would lose sight of what was happening, and the transactions would simply move to machines in neighboring towns. The call from “the police” still rings in the same living rooms. What changes is the address it sends someone to with a stack of cash.

The machine in Vancouver sold a simple idea: buying bitcoin should be as easy as buying a candy bar. Thirteen years on, it turns out that ease matters most to people who buy bitcoin with someone else’s hands. They need no hacker and no accomplice inside a bank. A box at a gas station that takes cash and can’t give it back is enough. The boxes are being hauled away, and the scheme that needed them is already looking for a new one.