Crypto Giants Linked to Bitcoin ATM Scam Ecosystem

As governments move to restrict or ban bitcoin ATMs due to their role in facilitating financial crimes, major cryptocurrency firms continue to supply these operators with the digital assets necessary to function [1]. Investigations reveal that prominent exchanges and trading firms have transferred billions of dollars in bitcoin to ATM networks, even as authorities warn that these machines are primary tools for scamming vulnerable individuals [1].

Key takeaways

• Major crypto firms, including Kraken and Gemini, have transferred billions of dollars in bitcoin to ATM operators [1].
• Bitcoin ATMs are increasingly targeted by regulators, with some jurisdictions passing legislation to outlaw them due to their association with fraud [1].
• The FBI has identified bitcoin ATMs as a "payment portal for scammers," noting that funds deposited into them are often sent overseas and cannot be recovered [1].
• While providing liquidity to these ATMs is not illegal, experts suggest that exchanges could effectively shut down the machines by cutting off their supply [1].

The flow of funds to ATM operators

Despite mounting pressure from law enforcement, the relationship between mainstream crypto companies and ATM operators remains robust. Kraken, for instance, has transferred at least $1.1 billion in bitcoin to ATM firms in recent years [1]. This includes $17 million sent to Athena Bitcoin after the District of Columbia’s attorney general publicly alleged that the company’s machines were being used to exploit residents [1]. Kraken maintains that it follows rigorous onboarding and monitoring standards to meet its regulatory obligations [1].

Other major players have maintained similar partnerships. Gemini provided more than half a billion dollars in bitcoin to Bitcoin Depot between May 2020 and March 2025 [1]. Additionally, the trading firm Cumberland DRW has supplied bitcoin to operators including Bitcoin Depot and CoinFlip [1]. In some instances, these transfers occurred while the ATM operators were under scrutiny for criminal activity; for example, Bitstamp sent at least $7 million to Crypto Dispensers between 2018 and 2024, a period during which the firm was later indicted for money laundering [1].

Why it matters

The persistence of these business relationships highlights a tension between the cryptocurrency industry’s push for mainstream financial integration and its continued reliance on high-risk infrastructure [1]. While firms like Kraken have sought approval for master accounts with the Federal Reserve, they remain deeply connected to a sector that regulators and the Federal Trade Commission have labeled a conduit for fraud [1]. As the U.S. government intensifies its broader crackdown on global criminal enterprises—recently seizing $8 billion in cryptocurrency from international "scam compounds"—the role of bitcoin ATMs as a domestic entry point for illicit funds remains a significant point of contention [1, 2]. With operators like Bitcoin Depot facing bankruptcy and state-level bans increasing, the future of these machines remains uncertain [1].