McKie thought the process for reclaiming her lost money was too much to handle. A friend at work helped her set up an online fundraiser last year to raise the $2,000 she lost.
Though state law establishes that a Minnesotan considered a “new customer” is entitled to a full refund when swindled at a cryptocurrency kiosk, local authorities who spoke to the Minnesota Star Tribune said cryptocurrency kiosk operators are exploiting a loophole to avoid paying refunds. Because scammers typically send victims information, like a QR code, to access a scammers’ account directly, many victims do not set up accounts and are therefore not considered “new customers.”
One Minnesotan, who spoke to the Star Tribune on the condition of anonymity for fear of becoming a scam victim again, received refunds from Athena Bitcoin and another operator called RockItCoin. He said Athena Bitcoin at first told him he was out of luck but later made him whole. Meticulous record keeping likely helped his case, he said.
Some authorities allege cryptocurrency operators intentionally make their fees difficult to understand. Earlier this year, Iowa Attorney General Brenna Bird sued Bitcoin Depot and CoinFlip, accusing the companies of introducing several confusing steps a customer needs to follow to learn how much a kiosk operator charges.
For example, to calculate Bitcoin Depot’s take, a user needs to multiply the market price of Bitcoin by the amount of cryptocurrency sent to determine its cash value; subtract that figure from the total amount of cash put into the machine; and figure in a nominal $3 flat fee. In the case of an $8,800 transaction, the Iowa attorney general calculated a $2,038.27 fee.
A scammer posing as law enforcement convinced Mellissa McKie that she would go to jail if she did not send thousands of dollars via cryptocurrency kiosks. (Alex Kormann/The Minnesota Star Tribune)
McKie recognizes in hindsight she could have escaped the ordeal quickly and without financial loss. Had her husband been home, she said, he would have convinced her the call was a con. Today, she is more cautious about answering her phone and just recently hung up on a scammer who tried to run a different scheme on her.