Bitcoin ATMs on the Rise in Detroit; Problematic Issues Rise, Too
A solution that is making headway entails Bitcoin ATMs. They are springing up in Detroit communities hit the hardest financially – low-income neighborhoods.
While proponents champion the machines as a way to help these communities, others see a slew of problems that could result. One problem entails some operators of the machines committing striking crimes against their competition.
Striking the right balance
The Detroit News reported that the city is home to 23 Bitcoin ATMs. As these ATMs are rolled out, they have become the subject of debate. Observers note that the crypto space is rife with scammers who prey on vulnerable victims. They also point out that these ATMs are mainly being installed in Detroit’s poorest neighborhoods, which are homes to these most vulnerable people.
The concern is that these are the communities that are often targeted by scammers, and we all know that these bad actors see plenty of opportunities to carry out their fraudulent deeds through the crypto space.
Escalating competition
The battle to be the Bitcoin ATM of choice in the city grew intense enough for one player to allegedly take a hammer to the Bitcoin ATMs installed by his competition.
Court filings state that Andrew Konja, one of the original Bitcoin ATM suppliers, had the screens on his competitors’ machines smashed in Detroit and Chicago.
The filings state that after smashing screens on Bitcoin ATMs, either Konja, or his associates, approached the owners of the sites where the smashed Bitcoin ATMs were located and offered to replace them with a Bitcoin ATM he owned and operated.
“The use of interstate wires to threaten lawful competitors for Bitcoin ATMs, including Plaintiff, telling them that harm will come to them if they attempt to compete in the Bitcoin ATM market. On at least one occasion, one of the Defendants, acting alone or in concert with others, told a competitor that he would be shot in the head if he continued to operate bitcoin ATMs in the Detroit metropolitan area.”
In addition, competitors were told that, if they did not pay a ransom in Bitcoin, their ATM machines would be smashed. At least one Bitcoin ATM operator paid the ransom so that his ATM machines would not be smashed.
No judgment has come down on the case, which was filed in 2016.
Due diligence needed in the wake of crypto newness
Observer Yaya Fanusie, a former economic and counter-terrorism analyst for the Central Intelligence Agency, told The Detroit News that the newness of cryptos makes it difficult to accurately pinpoint their dangers. He said:
“It’s a guess because the technology is new. We need time to collect data. The fact (that Bitcoin ATMs) are in the kind of areas you describe, only says how much digital currency is growing worldwide.”
While the goal may be to provide these low-income communities with an option to be able to take care of their financial needs in the wake of being ignored by the traditional banking community, attention must be given to helping people understand the nuances of the crypto world.