Crypto
Cryptocurrency laws and regulations
Overview of regulations, how they’re regulated, key challenges, and more resources for legal professionals
Legal terms · Securities law · Cryptocurrency laws
The expansion of virtual currencies like Bitcoin and Ethereum has put U.S. regulators in a dilemma between encouraging innovation and safeguarding investors.
The evolution of cryptocurrency is primarily due to the rise in technology worldwide. It has pushed financial boundaries, leaving with the possibility that cryptocurrencies may become the central element of the global economy.
The significance and impact of the use of cryptocurrency in the U.S. highlights the need to regulate it. However, there is a challenge in establishing a clear policy framework. With the digital revolution taking place through cryptocurrency, the state and federal governments are trying to determine how to define their role in regulating this new asset class in the best way possible.
Jump to ↓
What is cryptocurrency?
What is cryptocurrency regulation?
How is cryptocurrency regulated?
State regulations
International Standard-Setting Bodies
Challenges in the US crypto regulation
CoCounsel
Bringing together generative AI, trusted content, and expert insights for securities regulations
Meet your AI assistant ↗
What is cryptocurrency?
Cryptocurrency is a type of digital money that is a decentralized digital asset designed as a medium of exchange, utilizing cryptographic protocols to regulate the creation of new units. It exists only online and is not controlled by any government, central bank, or authority.
A digital or virtual currency that is not issued by any central authority, is designed to function as a medium of exchange, and uses encryption technology to regulate the generation of units of currency, to verify fund transfers, and to prevent counterfeiting.
(12th ed. 2024)
Cryptocurrency uses a secure technology called cryptography to keep transactions safe and verify fund transfers to prevent fraud. It operates on a decentralized system and transactions are recorded on a public ledger called blockchain. The regulatory treatment of cryptocurrency varies across jurisdictions, with legal considerations encompassing anti-money laundering compliance, securities laws, taxation, and consumer protection frameworks.
What is cryptocurrency regulation?
Crypto regulations are the legal rules and guidelines that are present and issued by governments to shape how digital assets such as virtual currency operate. These laws have varied approaches across nations.
In the U.S., there are various states wherein some are friendly towards market participants embracing crypto with clear regulations, while others ban it outright.
Around 60 percent of U.S. citizens lack confidence in cryptocurrency trading or investment, considering the existing systems to be unreliable or unsafe. One primary reason for this distrust may be the absence of a single, consistent set of laws to regulate cryptocurrencies.
The existing regulations range from covering everything about how cryptocurrencies are to be created and traded to how they interact with traditional financial systems. Well-defined rules can help the crypto market in the following ways:
- Help in protecting investors from scams and market manipulation
- Ensure that there is transparency in the transaction, along with accurate information
- Help prevent illegal activities like money laundering, fraud, misleading information, etc
- Clarify the tax rules that apply to digital currencies
- Encourages market participation and confidence in the investors while encouraging blockchain innovation
- Regulates the risks that are or may be associated with the transactions
How is cryptocurrency regulated?
No defined regulation is used to regulate cryptocurrency in the U.S. as of 2025.
However, a major crypto legislation was introduced in 2024, i.e. the Financial Innovation and Technology for the 21st Century Act (or FIT21), that has been passed by the U.S. House of Representatives but has not yet been enforced. The legislation is aimed at emphasizing the role of the Commodity Futures Trading Commission (CFTC) as a lead crypto regulator in the U.S.
In the absence of one framework for cryptocurrency, the authorities try to regulate and enforce the already existing laws both at the federal and state levels, which are as follows.
Federal regulations
At the Federal level, regulations have predominantly dealt with various administrative agencies and bureaus.
The Securities and Exchange Commission (SEC)
The SEC primarily deals with securities such as convertible notes, stocks, debentures, etc. They aim to protect investors through mandatory registration of the securities that qualify for it.
The SEC brought lawsuits against major platforms such as Coinbase, Binance, Kraken, etc, for violation of regulations.
Due to the difference between the cryptocurrency and securities, a judicial split emerged in 2023, with Southern District of New York (SDNY) Judge Torres ruling in SEC v. Ripple Labs that only the institutional sales of XRP were securities, while Judge Rakoff in SEC v. Terraform Labs held that Terraform’s UST stablecoin was a security.
Courts remain divided on this issue at the time of this writing.
Commodity Futures Trading Commission (CFTC)
CFTC is a federal agency that is tasked with regulating U.S. commodities and derivative markets.
The CFTC regulates cryptocurrencies as commodities under the Commodity Exchange Act and has developed jurisdiction in derivative markets, all of which are set forth in decisions such as CFTC v. McDonnell (2018) and CFTC v. My Big Coin Pay (2018), etc.
In 2017, the CFTC introduced a self-certification process for bitcoin futures which allowed exchanges to launch crypto derivatives. For enforcement measures, the CFTC has engaged in high-profile enforcement matters against Uniswap, Binance, Celsius, Ooki DAO, and secured an order against defaulted FTX to pay a penalty of $12.7 billion.
Internal Revenue Service (IRS)
Since 2014, the IRS has treated cryptocurrency as a digital representation of value which is different from a representation of the U.S. dollar or any other real currency. It functions as a unit of account, a store of value, and a medium of exchange.
Being categorized as property makes each sale, trade, or buying of cryptocurrency taxable under capital gains taxes like stocks or property. Regardless of whether one incurs profit or loss, correct reporting of the same must be done according to the IRS.
US Department of the Treasury’s Financial Crimes Enforcement Unit (FinCEN)
FinCEN was the first U.S. federal regulator to address cryptocurrency, by issuing guidance back in 2013.
It governs virtual currency businesses and wallet services as Money Services Businesses and mandates them to have anti-money laundering and counter-terrorism financing regulations, specifically on Money Services Businesses dealing with Convertible Virtual Currency.
US Department of the Treasury’s Office of Foreign Assets Control (OFAC)
OFAC is a regulatory agency that administers and enforces U.S. economic and trade sanctions to maintain national security and foreign policy interests.
These sanctions target countries, terrorists, narcotics traffickers, and other threats including those involved in cryptocurrency activities. OFAC applies the same sanctions compliance standards to transactions involving digital assets as it does to those involving traditional currency.
U.S. Department of Justice (DOJ)
In October 2021, the DOJ created the National Cryptocurrency Enforcement Team (NCET) to enhance its investigative resources to control criminal activity in the crypto environment.
The DOJ has been involved in several high-profile cases and has even charged the crypto market with insider trading, including against former Coinbase exchange employees.
Federal Deposit Insurance Company (FDIC)
After issuing joint prudential crypto releases in November 2021, the FDIC instructed all FDIC-supervised institutions in April 2022 to notify if they were conducting crypto business or intended to engage in it. This was required so the FDIC could review the information provided.
Federal Reserve Board (FRB)
FRB supervises the banking institutions and banking activities.
It issued reports on stablecoins and central bank digital currency in January 2022. After that jointly in 2023, with FDIC and OCC, the FRB released two statements on the risks that are associated with crypto assets and the participants.
The FRB also issued supervisory guidance requiring banks under its oversight to notify their lead supervisory contact before engaging in crypto-asset activities.
State regulations
Financial regulators for cryptocurrency at the state level are as follows:
New York State Department of Financial Services (NYDFS)
In contrast to other crypto regulations that have been prominently adopted by other states, New York has a different regime that is focused on customer protection.
It was the first comprehensive crypto regulatory regime among major U.S. states which led the way by introducing the concept of BitLicensees — used to self-certify the listing or adoption of new virtual currencies. However, it is generally considered to be prohibitive and burdensome by the market participants.
California Department of Financial Protection and Innovation (DFPI)
On one hand, the DFPI has shown a friendly approach to the crypto market participants providing a narrow reading of state licensing requirements. On the other hand, it has implemented a comprehensive state crypto regulatory framework.
State attorneys general, including the New York State Attorney General (NYAG)
NYAG is one of the crypto regulators in the U.S. that has actively participated in filing charges and settling with the crypto platforms and market participants of all sizes.
International Standard-Setting Bodies
There is a constant rise in the involvement of digital currency transactions around the world, which often lightens the line between the borders as well.
Now, given the evolving complexities of digital asset markets, several prominent international financial standard-setting bodies have undertaken initiatives to regulate cryptocurrencies and make sure that they are regulated across jurisdictions.
Bank for International Settlements (BIS)
BIS acts as the central bank, and therefore it plays a role in shaping the regulatory framework for Central Bank Digital Currencies and stablecoins. BIS has issued various reports on stablecoin arrangements.
Basel Committee on Banking Supervision (BCBS)
BCBS is the primary global standard-setting body for prudential bank regulation, which has developed a framework to govern the exposure of banks to crypto assets.
Financial Stability Board (FSB)
The FSB contains the regulatory, supervisory, and oversight recommendations for crypto-asset markets which establishes high-level global standards for crypto regulation.
Financial Action Task Force (FATF)
FATF is a global authority on anti-money laundering and counter-terrorist financing, it has issued extensive guidance on mitigating illicit finance risks in the crypto sector.
3 Key challenges
Cryptocurrency regulation in the U.S. presents significant challenges due to its fragmented nature, requiring businesses to comply with a complex framework of overlapping and, at times, conflicting federal and state laws.
- Since each state has different regulations, it makes nationwide operations difficult.
- Money transmitter licensing rules differ across states, which may be friendly or strict, making compliance restrictive and complex.
- There is a lack of clear crypto-specific laws which forces businesses to interpret existing financial regulations in different ways, leading to uncertainty and misinterpretation.
Special Report
Packet of subscriber resources from the legal industry’s most trusted how-to service
Access special report ↗
More expert resources
Get access and view curated resources maintained by our attorney-editors below when you sign up for a free trial.
Toolkits
Practice Notes
HOLYOKE, Mass. (WWLP) – The Holyoke Police Department recently prevented a resident from falling victim to a Bitcoin scam and is urging community members to remain cautious of cryptocurrency fraud.
Holyoke Police Chief Brian Keenan stated that this recent scam involved a caller stating over the phone that the person had an active arrest warrant for missing jury duty. The scammer claimed that if the victim owed $6,000 or they would be at risk of arrest.
The victim was then instructed to withdraw money from a bank and take it to a local Bitcoin kiosk to deposit it. After depositing some money, the victim realized they were being scammed and called the Holyoke Police Department.
Detective James Parnell assisted the resident and canceled the transaction before it closed out. The victim is expected to receive a refund from the kiosk operator. In most cases involving these types of transactions, the money cannot be recovered, as it can be processed within minutes.
Holyoke Police say that these types of Bitcoin scams have defrauded western Massachusetts residents of more than $2 million in the past two to three years. If you receive a phone call claiming you owe money and must deposit cash into a Bitcoin kiosk, you are urged to immediately hang up.
Local News Headlines
WWLP-22News, an NBC affiliate, began broadcasting in March 1953 to provide local news, network, syndicated, and local programming to western Massachusetts. Download the 22News Plus app on your TV to watch live-streaming newscasts and video on demand.
Key Takeaways
- Sharplink and Forward join Russell indexes on June 29 with ETH and SOL treasury bets.
- Sharplink holds 874,351 ETH worth $1.8B, above its $1.22B market cap valuation.
- Russell inclusion may boost liquidity and institutional access for crypto treasury firms.
Crypto Treasury Firms Go Mainstream With Russell Index Inclusion
Sharplink Gaming is set to join the Russell 2000 and Russell 3000 indexes, marking a fresh milestone for publicly traded crypto treasury companies seeking wider acceptance in traditional equity markets.
The ethereum-focused firm disclosed that its inclusion will take effect on June 29, when Russell’s semiannual index reconstitution is implemented. The move places Sharplink inside two widely tracked U.S. equity benchmarks used by fund managers, exchange-traded funds and institutional investors.
Chief Executive Officer Joseph Chalom said the listing validates the company’s Ethereum treasury strategy.
Joining the Russell 2000 and Russell 3000 is a meaningful validation of Sharplink’s institutional-grade ETH treasury strategy, and we believe will broaden SBET’s shareholder base while strengthening our access to capital markets.
Sharplink holds 874,351 ETH, worth about $1.8 billion at current prices cited by the company. Even so, its shares trade below the value of its ethereum holdings. The company’s market capitalization stood at roughly $1.22 billion at the close of trading on Tuesday, May 26.
Sharplink’s index entry follows a similar step by Bitmine Immersion Technologies, the largest ethereum treasury company. Bitmine will be added to the Russell 1000, an index that tracks the 1,000 largest U.S. companies by market value.
Forward Industries, another crypto treasury firm, will also be added to the Russell 2000 and Russell 3000. The company has shifted from medical design into a solana-focused treasury strategy.
Forward bought $1.58 billion of SOL last year at an average price of about $232 per token. Solana has since fallen to $83.78, leaving the position down about 64% from the purchase price.
The company’s SOL holdings are now valued at around $588 million. That remains well above Forward’s market capitalization of about $350 million. At that level, Forward is still roughly 2.4 times larger than the Russell 2000’s smallest member, based on data from the index provider’s website.
Forward CEO Ryan Navi said the company expects index inclusion to broaden its investor base, improve liquidity, and raise its profile with long-term institutions.
Together, the additions show how crypto treasury firms are moving further into mainstream equity benchmarks. Russell indexes are tied to more than $12.2 trillion in benchmarked assets and investments, giving the included companies a larger stage even as questions remain over how markets should value their token-heavy balance sheets.
Bitcoin ATMs, the now-ubiquitous machines in gas stations and smoke shops that convert physical cash to cryptocurrency, are in trouble.
Over the past few months, the Canadian government announced a proposal to ban the scam-prone machines while Tennessee, Minnesota and Indiana passed legislation to outlaw them. Just last week, the world’s largest operator of these ATMs, Bitcoin Depot, filed for bankruptcy, citing litigation and government action. Experts and authorities have for years warned about the machines’ heavy use by criminals, who rely on them as a convenient means to collect funds from scam victims.
But as the crackdown on crypto ATMs widens, one critical aspect of the scam ecosystem has escaped scrutiny: the crypto giants that have enabled these ATM operations through massive transfers of bitcoin. Because these machines often take in cash and convert that cash to bitcoin, the crypto necessary to make such conversions are essential to the ATM firms.
At ICIJ’s request, a group of cryptocurrency investigators traced billions of dollars in bitcoin transfers from brand-name crypto firms directly to the coffers of ATM companies, even as authorities issued increasingly dire warnings about potential criminal activity. ICIJ found that after attorneys general in Massachusetts, Iowa and Washington, D.C., alleged that top ATM operators were dealing heavily in scam transactions, major crypto companies continued selling them big sums of bitcoin.
This included U.S.-based exchange Kraken, which has transferred at least $1.1 billion worth of bitcoin to crypto ATM operators in recent years. ICIJ found that Kraken sent the ATM operator Athena Bitcoin at least $17 million worth of cryptocurrency after District of Columbia authorities singled out its machines last September.
“Athena’s bitcoin machines have become a tool for criminals intent on exploiting elderly and vulnerable District residents,” D.C. Attorney General Brian Schwalb said in a statement at the time. “Athena knows that its machines are being used primarily by scammers yet chooses to look the other way.”
Athena Bitcoin has rejected these allegations. In response to questions from ICIJ, Kraken said that it takes its regulatory obligations seriously and maintains robust compliance controls. In a statement, a spokesperson said its “business relationships are subject to rigorous onboarding, ongoing due diligence, and enhanced monitoring standards.”
Between May 2020 and March 2025, the crypto firm Gemini provided more than half a billion dollars in bitcoin to Bitcoin Depot. Cumberland DRW, a crypto trading firm founded by billionaire Don Wilson, has also been a major supplier of bitcoin to crypto ATM firms, including Bitcoin Depot and CoinFlip, according to blockchain researchers.
Cumberland and Gemini did not respond to requests for comment.
In some cases, big crypto players provided bitcoin to ATM operators that were later criminally charged, ICIJ found. For instance, the crypto exchange Bitstamp sent at least $7 million to a firm called Crypto Dispensers between 2018 and 2024 — which fell within a timeframe when the firm used its ATM network for money laundering, according to a federal indictment.
Bitstamp did not respond to requests for comment. Firas Isa, the founder of Crypto Dispensers, who is also under indictment for money laundering, told ICIJ in an interview that Bitstamp performed rigorous audits on his firm. Isa denies the allegations in the indictment, which states that his firm received large amounts of money derived from crimes including from scam victims.
At ICIJ’s request, a half-dozen experts who specialize in analyzing bitcoin transaction records on the public ledger known as the blockchain helped examine and confirm details of these transactions. These experts included Fredric Buret, of the crypto investigations firm Recoveris, and Joshua Cooper-Duckett of the firm Cryptoforensic Investigators.
Jason Ghetian, a former FBI agent specializing in crypto scams, told ICIJ that the providers of large amounts of bitcoin to crypto ATMs should have been wary of those business relationships, given the machines’ reputation for being heavily used by criminals. “These exchanges could shut these ATMs down if they don’t provide liquidity for them,” Ghetian said.
The companies have not, however, broken the law by providing the ATMs with bitcoin liquidity. In recent years, the crypto industry’s biggest players have vigorously sought to be accepted as part of the mainstream financial system, with Kraken just this year being the first to receive approval for a so-called master account with the Federal Reserve. Even amid this push for broader recognition, the most prominent crypto firms remain deeply entwined with a part of the industry that lawmakers around the world are scrambling to protect consumers from.
‘How can people be so cruel?’
The first bitcoin ATM went live in late 2013 in Vancouver, Canada, creating a fast bridge from cash to cryptocurrency. By combining cash and cryptocurrency — two forms of money that are difficult to trace — the machines provided a high level of anonymity for users seeking to move funds discreetly.
As the machines spread across the globe, criminals took notice. A key feature of the machines is their ability to move funds across national borders with deep anonymity and few checks. As the industry has grown rapidly, concerns about bitcoin ATMs have only mounted. In 2021, the FBI warned that criminals were increasingly relying on these services to receive funds from scam victims. Once victims deposit money into a bitcoin ATM — often at the behest of a scammer who has convinced them they are funding their own crypto accounts — the cryptocurrency is often sent overseas, where it can rarely be recovered.
Experts and local law enforcement officials have raised a steady stream of alarms about the machines. In 2024, the U.S. Federal Trade Commission called crypto ATMs “a payment portal for scammers.” Despite that, tens of thousands of the machines remain in operation around the United States.
The largest ATM operators have been voracious consumers of bitcoin, which enables cash-to-cryptocurrency conversions, according to experts. “If you’re doing hundreds of millions in volume, you need to have a place where you can quickly buy bitcoin,” said Marc Grens, whose business DigitalMint operated a nationwide network of the machines for nearly a decade. “You need a large enough source that allows you to buy enough bitcoin to replenish your inventory on demand.”
Grens said his firm exited the ATM business due to the pervasiveness of scams. “Cleaning up fraud means you’re not making revenue,” Grens said.
Prior to its bankruptcy last week, Bitcoin Depot had nearly 10,000 crypto ATMs operating around the world — from Alaska to Tasmania. In a lawsuit against Bitcoin Depot filed in early 2025, Iowa’s attorney general alleged that its analysis of the company’s machines in the state showed that between October 2021 and July 2024 more than half of the transactions involved scams.
Cleaning up fraud means you’re not making revenue — former crypto ATM operator Marc Grens
Bitcoin Depot has denied wrongdoing, saying that it “cannot be held liable for the criminal acts of third-party scammers, especially considering the robust warnings and safeguards provided” on its machines and during transactions.
The New York-based Gemini crypto exchange, owned by the billionaire Winklevoss twins, provided Bitcoin Depot with more than half a billion dollars worth of bitcoin in recent years. These transactions appear to have ended with a March 2025 bitcoin transfer of roughly a half-million dollars.
The Winklevosses have positioned Gemini at the center of a push to allow crypto firms to self-regulate via a private crypto association that would incentivize “the detection and deterrence of manipulative and fraudulent acts and practices.”
Blockchain analysts have examined money flows from crypto ATMs and found red flags that, in theory, are visible to anyone with high-quality cryptocurrency analysis tools. In 2024, the analysis firm TRM said it had found recurring patterns pointing to money laundering across hundreds of crypto ATMs. The firm said apparent financial crime risk indicators of the ATMs were “significantly higher than average risk scores for crypto exchanges,” in a review of transactions linked to machines in California.
ICIJ reviewed the activity of one high-volume cryptocurrency address — similar to a bank account — owned by Bitcoin Depot. That address used the bitcoin it had on hand to send out transactions initiated by users of Bitcoin Depot ATMs. Brad Thorne, a police detective in Boise, Idaho, who investigates crypto scams, said he had seen the same address used to transmit victims’ bitcoin in more than a hundred cases. “That address shows up consistently in my investigations,” Thorne said.
The Bitcoin Depot address also received sizable bitcoin transfers from Gemini. Between 2021 and March 2025, Gemini accounts sent tens of millions of dollars worth of cryptocurrency to the address.
Ann Tatem, a 77-year-old resident of Lake City, Florida, lost much of her life savings to a scammer relying on a Bitcoin Depot ATM using this same cryptocurrency address, according to experts who reviewed the transaction. In April 2025, Tatem, exhausted after a long night of caring for her sick husband, activated her computer to a flashing screen warning that she’d been hacked and instructing her to call a 1-800 number. When she dialed the number, she spoke with a person claiming to be with the Federal Trade Commission. That person told her authorities needed to freeze her bank accounts and, to safeguard her funds, directed her to deposit $10,000 in cash into a local Bitcoin Depot ATM.
I couldn’t eat, I could not sleep. It was like, how can people be so cruel? — crypto ATM scam victim Ann Tatem
Tatem had joined thousands of Americans who have collectively lost hundreds of millions of dollars to sophisticated scammers relying on ATMs to rapidly convert victims’ cash into cryptocurrency. In all of these crimes, law enforcement has little chance of tracing the cryptocurrency to an owner.
“That was a lot of our savings. We’re simple people,” Tatem said, adding that the crime left her traumatized. “I couldn’t eat, I could not sleep. It was like, how can people be so cruel? It’s just beyond my comprehension.”
A ‘silent partner to many scammers’
Over the past six months, the state of Connecticut suspended Bitcoin Depot’s banking license for lapses in anti-money laundering controls; Missouri’s attorney general opened an investigation into several crypto ATM operators, including Bitcoin Depot; and Nevada and Maine settled enforcement actions with the firm, requiring it to pay fines and comply with state rules. Massachusetts’ attorney general also recently sued Bitcoin Depot, alleging most of its revenue was derived from scams.
Another major sender of cryptocurrency to Bitcoin Depot was Cumberland DRW, the crypto arm of the Chicago-based trading firm DRW, founded by billionaire and famed trader Don Wilson. He made headlines last year when DRW invested $100 million into a Trump family crypto project shortly after the U.S. Securities and Exchange Commission dropped an investigation into Cumberland, according to the Financial Times. In a March filing, Bitcoin Depot named Cumberland, Gemini and other firms as its bitcoin suppliers.
Even after Gemini appeared to stop sending funds to Bitcoin Depot in March 2025, Cumberland continued to do so, according to experts who reviewed the transactions. These transactions lasted until March 30, 2026.
According to the experts ICIJ consulted, Cumberland is also a key provider of cryptocurrency to CoinFlip, which has been identified as the world’s second-largest bitcoin ATM operator behind Bitcoin Depot. Iowa’s attorney general sued CoinFlip last year, alleging that all of its top 20 crypto ATM users in Iowa, among many others, were scam victims.
“At best, CoinFlip is a willfully blind participant in the victimization of hundreds of Iowans,” according to the state’s lawsuit. “At worst, it is a silent partner to many scammers preying on Iowans.”
CoinFlip did not provide comment for this story. In an April filing, the firm’s lawyers said Iowa authorities have deployed baseless accusations in a “smear campaign” that has damaged its standing with regulators, legislators, consumers and business partners. The firm has denied that it enables or tolerates scammers on its machines and called the Iowa suit an “unmistakable assault on the nature of cryptocurrency itself.” CoinFlip said it requires its customers to read multiple fraud-related warnings and disclaimers when using its machines.
In recent years, Cumberland has sent CoinFlip over a billion dollars worth of bitcoin, according to experts who reviewed the transactions. These transactions were as large as $5 million apiece, the experts said.
Until mid-2024, CoinFlip also received roughly $1.5 billion worth of bitcoin from London-based trader Enigma Securities, according to the experts. Enigma Securities is a subsidiary of the Makor Group. Like Cumberland, Enigma Securities labels itself as a so-called crypto liquidity provider, giving businesses fast access to wholesale portions of various cryptocurrencies. Crypto ATMs have been effectively banned from operating in the United Kingdom because authorities have not granted a licence to any of the firms.
Enigma Securities did not respond to requests to comment on this story.
The experts who reviewed data for ICIJ said that Enigma Securities was a bitcoin liquidity provider to the crypto ATM operator Bitcoin of America, which was shut down in 2023 after its founder, Sonny Meraban, was arrested in Florida for operating ATMs without proper licensing. Meraban told ICIJ that, before his arrest, his firm used multiple services, including Enigma Securities and FalconX, a crypto trading company headquartered in San Mateo, California. Meraban said he used accounts with multiple exchanges so that he could shop around for the cheapest bitcoin to improve his profit margins.
“We needed a lot of bitcoin and were linked up to exchanges to get that bitcoin every day,” said Meraban, who pleaded guilty in 2023 to charges relating to his firm’s licensing. “This is how the business model works.”
Enigma Securities did not respond to requests for comment. FalconX declined to provide comment for this story.
ICIJ found that Kraken has played a key role in supplying bitcoin to several major crypto ATM operators in recent years, including more than $700 million in bitcoin to Coinhub and at least $245 million in bitcoin to Byte Federal, according to experts who reviewed these transactions.
Coinhub did not respond to a request for comment. In an interview with ICIJ, Byte Federal’s CEO Paul Tarantino said Kraken is the firm’s sole liquidity provider. “We have a really good relationship with Kraken,” he said.
Tarantino said that Byte Federal is a leader in anti-fraud measures. In early 2024, he said, Byte Federal began rigorously vetting all customers over the age of 60, resulting in 84% of those would-be customers being blocked due to scam concerns. He added that the number of those visitors to his company’s machines has recently fallen, however. “Scammers that get ahold of these seniors are making a decision not to send them to our kiosks.”
Kraken’s relationship with Athena Bitcoin, another top crypto ATM operator, appears to have expanded in late 2023. The exchange began sending the firm more than a million dollars worth of bitcoin each week on average until mid-2025, when the pace slowed, according to the experts.
Last September, Washington D.C.’s attorney general alleged that 93% of Athena Bitcoin’s transactions involved a scam, saying the firm “fails to provide effective oversight, creating an unchecked opportunity for illicit international fraud.”
Following the legal action, Athena Bitcoin told a local news station that it “strongly disagrees with the allegations” and that it will fight the charges. The firm said it has “multiple safeguards, from prominent warnings and daily transaction limits to five separate verification screens designed to stop coerced transactions,” according to the report.
The day after the D.C. attorney general’s announcement, a Kraken account sent Athena more than $270,000 worth of bitcoin in a single transaction, according to experts ICIJ consulted. And Kraken accounts continued to send large amounts of cryptocurrency to Athena Bitcoin, amounting to about $17 million as of March 31, 2026, when the transfers appear to have stopped, the experts said.
Athena did not respond to requests to comment for this story. In a March filing, Athena Bitcoin called Kraken its “primary crypto exchange.” In a subsequent filing dated May 14, Athena did not mention Kraken.
In March, Kraken became the first crypto firm approved for a Federal Reserve master account, which allows the exchange to move traditional money directly via U.S. central banking infrastructure, a privilege never before granted to a crypto firm. Republican Sen. Cynthia Lummis of Wyoming, a proponent of the crypto industry, called the approval a “watershed moment for the digital asset industry” and a “monumental step towards making payments safer, faster, and cheaper.”
Last month, the FBI released new figures showing that crypto ATM scams had recently surged, with Americans losing $389 million relating to the machines in 2025. These scams especially targeted Americans over 60, like Ann Tatem.
Tatem told ICIJ that the loss of retirement savings forced her to cash out her life insurance plan. “I just hope something can be done about those machines,” she said.
-
Minneapolis, MN6 seconds agoMayor Frey vows ‘top-notch’ hire as Minneapolis police chief search looms
-
Indianapolis, IN6 minutes agoArmed carjacking reported at Fishers IHOP; 2 Indianapolis teens arrested
-
Pittsburg, PA12 minutes agoMan fatally shot by co-worker in Pittsburgh area, police say
-
Augusta, GA18 minutes agoAugusta cuts dozens of trees on Broad Street, raising maintenance questions
-
Washington, D.C24 minutes agoAt Washington, D.C. show, Springsteen announces all-star Oct. 3 Power to the People Festival
-
Cleveland, OH30 minutes agoCleveland Cavaliers 2026 Salary Cap Tracker: How Much Room, Flexibility Do They Have This Offseason?
-
Austin, TX36 minutes agoTexas is getting a massive new state park, and it will be the second largest in the state
-
Alabama42 minutes agoAlabama asks Supreme Court to approve its racially gerrymandered maps
