Feds Bust Crypto ATM CEO in Massive $10 Million Money Laundering Operation

Federal prosecutors have charged the founder of a Chicago-based cryptocurrency ATM company in a multi-year money-laundering conspiracy that allegedly moved at least $10 million in fraud and drug proceeds through crypto kiosks nationwide.Firas Isa, 36, founder and CEO of Virtual Assets LLC, which operated publicly as Crypto Dispensers, was indicted on one count of money-laundering conspiracy, carrying a maximum sentence of 20 years in federal prison.Isa and the company have pleaded not guilty. A status hearing is scheduled for January 30, 2026, before U.S. District Judge Elaine E. Bucklo in Chicago.Crypto ATM Network Used to Wash Millions From Fraud and Drug TraffickingAccording to the indictment, unsealed in the Northern District of Illinois, Isa and a co-conspirator operated Virtual Assets as a cash-to-crypto exchange. The exchange offered a network of ATMs and bank accounts that allowed users to deposit cash, checks, or wired funds for conversion into digital assets. Prosecutors allege that between 2018 and 2025, the operation processed millions of dollars sent by criminals and, at times, by fraud victims unknowingly depositing illicit funds. Source: DOJThe money was allegedly converted into cryptocurrency and transferred to external wallets to obscure its source.Investigators say Isa knew the proceeds were tied to wire-fraud schemes and narcotics trafficking. The indictment describes transactions where Isa and a co-conspirator allegedly collected cash from fraud operations, converted it into crypto, and routed the assets through multiple wallets to conceal ownership and control.The case, brought by a special April 2025 grand jury, includes a forfeiture notice seeking any property linked to the alleged crimes, including a personal money judgment. If specific assets cannot be recovered, prosecutors plan to pursue substitute property as permitted under federal law. Officials stressed that an indictment is only an allegation and that the defendants are presumed innocent unless proven guilty.Lawmakers Push New Rules for Crypto ATMs After Spike in Scam ComplaintsThe charges arrive as federal and state authorities intensify crackdowns on crypto ATM-related fraud nationwide, which has surged, particularly targeting older victims.In September, the District of Columbia’s Attorney General filed a separate lawsuit against Athena Bitcoin, one of the largest crypto ATM operators in the United States. The suit alleges that 93% of the company’s deposits in Washington, D.C., during a five-month period were tied to scams, many involving elderly residents pressured into transferring savings through Bitcoin kiosks. Prosecutors in that case say the company charged undisclosed fees as high as 26% while failing to implement meaningful safeguards.Federal data shows sharp increases in losses connected to cryptocurrency ATMs. The FBI reported nearly 11,000 related complaints in 2024, totaling more than $246 million.Source: Federal Trade CommissionThe Federal Trade Commission found that losses rose from $12 million in 2020 to $114 million in 2023, with victims aged 60 and above accounting for more than two-thirds of reported cases. Median losses in that age group reached $10,000 per incident.Lawmakers have begun responding with new proposals. In February, Senator Dick Durbin introduced the “Crypto ATM Fraud Prevention Act,” which would impose transaction caps, require direct communication with users conducting higher-value transfers, and mandate refunds for certain fraud victims. Durbin described the measure as an attempt to curb scams that increasingly involve intimidation tactics targeting seniors.Multiple states are pursuing similar regulatory approaches. Wisconsin legislators recently introduced bills to bring the state’s more than 580 crypto kiosks under money transmitter licensing requirements. The proposal also includes setting daily transaction limits, imposing stricter identity verification procedures, and requiring fraud warnings on machines. Spokane, Washington, voted to ban crypto ATMs entirely following federal investigations that linked kiosks in the region to large-scale fraud schemes.International regulators have moved in the same direction. New Zealand imposed a complete ban on cryptocurrency ATMs as part of updated anti-money laundering reforms, while Australia’s financial intelligence agency introduced stricter rules and declined to renew a registration for a local operator.The post Feds Bust Crypto ATM CEO in Massive $10 Million Money Laundering Operation appeared first on Cryptonews.