A legal spat is underway between a crypto kiosk manager and the McLennan County Sheriff’s Office. It all started with an elderly woman falling victim to an elaborate scam involving a crypto ATM.

An 82-year-old woman from Crawford, Texas, was tricked by scammers into putting $15,000 dollars of her own cash inside a Bitcoin-like ATM. Police quickly took her side and stepped in to help her recoup her loss. However, after the local sheriff’s office seized the cash from the machine, the ATM’s operators sued.

An Elaborate Fraud With a Crypto ATM

According to a report by local news source KWTX, Bitcoin Depot—under the auspices of Lux Vending—is an aggrieved party in a lawsuit claiming that the sheriff’s office unlawfully seized the cash. The ATM operator alleges that police returned it to the woman without following appropriate due process.

The scam involved a fraudulent email containing a link to a recipe, which activated ransomware. In an attempt to resolve the situation, the victim contacted “customer support.” The supposed support agent connected the woman to a “fraud investigator” who claimed her personal information had been compromised. 

The so-called investigator advised her not to involve law enforcement or her bank. The same person then convinced her that a check had been written in her name for $15,000. He instructed her to withdraw cash from her bank and deposit it into a Bitcoin machine at a specific store.

The woman, fearing the check would clear soon, followed the instructions and deposited the money in increments of $100 while the scammer remained on the phone with her throughout the process.

Accusations Against Police “Hogwash,” Says Sheriff

“While the company is sympathetic to the victimized customer, as stated in the petition, the actions taken by the McLennan County Sheriff’s Office are unlawful and violate Bitcoin Depot’s rights under both the Texas and US Constitutions,” said Houston attorney John MacVane, who represents Lux Vending, in comments quoted by KWTX.

“Bitcoin Depot looks forward to making our arguments in court and seeking the return of our property.”

McLennan County Sheriff Parnell McNamara called the accusation “a bunch of hogwash.” He continued:

“As far as I am concerned, they are a bunch of vultures who want to take the money back from this person who has already been victimized. I think it is a real travesty. The money does not belong to them. It was scammed. It still belongs to the lady who put it in there. So I think it is preposterous that they have filed this lawsuit.”

Crypto ATMs are the subject of increasing debate not just in a Texas county, but across the world. In many jurisdictions, their legal status, and their future, are up in the air.

Countries such as the United Kingdom have effectively banned them. However, the United States has experienced a remarkable surge in crypto ATMs in recent years. With 4,212 Bitcoin ATM machines in January 2020, the growth rate has soared by an astounding 652% in a little over three years.

But their unfamiliarity to many elderly people can present a doorway to scams. This week, the SEC launched its “Never Stop Learning” campaign to help educate geriatrics on financial risks to investors. The SEC listed “crypto scams” as one of the crimes to watch out for.

BeInCrypto has reached out to Bitcoin Depot and other parties for comment on this story.