The Iowa Supreme Court ruled in favor of Bitcoin Depot, the operator of cryptocurrency ATMs, in a case related to fraud, overturning a previous decision to refund the victims of scams. The court found that the company acted within the law and timely warned users about potential risks.
This is reported by Business • Media
Case Overview and Court Decision
According to the new ruling, the $28,000 that was deposited by the victims of fraud through Bitcoin Depot ATMs must be returned to the company. This decision overturned a prior verdict from a lower court that mandated the return of the seized cash to the victims.
The frauds occurred between 2023 and 2024, when citizens transferred funds through ATMs in Linn County. The police seized the cash, but it was not possible to return the bitcoins.
Bitcoin Depot challenged the decision, emphasizing that users entered into agreements with them that included warnings about the risks of fraud. Judge Dana Oxley noted that the warnings on the ATM screens do not make the company liable for all fraudulent transactions. The arguments of one victim, Kerry Carlson, regarding coercion were also dismissed due to lack of evidence.
“Bitcoin Depot respects the Iowa Supreme Court’s decision and views it as a positive step towards clarifying the legal framework concerning cryptocurrency transactions and affirming the importance of working with law-abiding and transparent operators like our company.”
Further Legal Implications
Despite the victory in this case, Bitcoin Depot remains a defendant in another lawsuit filed by the Iowa Attorney General. The mentioned lawsuit claims that fraudulent operations account for over 98% of all transactions processed through their ATMs, and victims in the state have lost more than $20 million. Regulators express concern that the company misleads customers about the possibilities of refunds and retains a significant portion of the transfers.
It is worth noting that there was a previous report of an artist from Los Angeles losing over $2 million due to fraud on the Coinbase platform.