Feds Arrest Crypto ATM CEO in Major $10 Million Money Laundering Case

Federal prosecutors have brought charges against the founder of a Chicago-based cryptocurrency ATM firm for allegedly being involved in a multi-year money-laundering scheme that funneled over $10 million in proceeds from fraud and drug-related activities through crypto kiosks across the country.

Key Takeaways

Firas Isa, CEO of Virtual Assets LLC, has been charged in a $10 million money-laundering conspiracy involving cryptocurrency ATMs.
Isa's operation allegedly processed millions in funds tied to fraud and drug trafficking from 2018 to 2025.
Federal and state authorities are increasing scrutiny of crypto ATMs due to rising scam incidents, particularly affecting elderly individuals.
New legislative measures are being proposed to regulate transactions and enhance consumer protections in the realm of crypto ATMs.

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

Firas Isa, 36, founder and CEO of Virtual Assets LLC—operating publicly as Crypto Dispensers—faces one charge of money-laundering conspiracy, which carries a maximum prison sentence of 20 years.

Both Isa and the company have entered a not guilty plea. A status hearing is set for January 30, 2026, under U.S. District Judge Elaine E. Bucklo in Chicago.

Crypto ATM Network Allegations: Washing Millions From Criminal Activities

According to the unsealed indictment in the Northern District of Illinois, Isa and a co-conspirator ran Virtual Assets as a cash-to-crypto exchange service.

The exchange provided ATMs and bank accounts, enabling users to deposit cash, checks, or wire transfers that would be converted into digital assets.

Prosecutors claim that from 2018 through 2025, millions of dollars were processed through this operation, much of it from criminals and, occasionally, from unsuspecting fraud victims.

Crypto ATM Network Allegations

Reportedly, the funds were converted into cryptocurrencies and transferred to external wallets to hide their origins.

Investigators allege that Isa was aware that these proceeds were linked to wire fraud schemes and drug trafficking.

The indictment further details how Isa and a co-conspirator allegedly collected cash from fraudulent operations, converted it to crypto, and then routed the assets through various wallets to mask their ownership and control.

A special grand jury convened in April 2025 has included a forfeiture notice aimed at seizing any property connected to the alleged crimes, along with any relevant personal financial judgments.

If certain assets cannot be retrieved, prosecutors are prepared to pursue substitute properties as allowed under federal law.

Officials have reiterated that an indictment is merely an accusation and that the defendants maintain the presumption of innocence until proven guilty.

Legislative Response: New Regulations Amid Rising Scam Complaints

The charges come at a time when federal and state authorities are ramping up efforts to combat fraud linked to crypto ATMs, particularly as incidents targeting older adults have increased.

In September, the Attorney General for the District of Columbia initiated a lawsuit against Athena Bitcoin, one of the largest operators of crypto ATMs in the U.S.

The lawsuit claims that 93% of the company's deposits in Washington, D.C., during a five-month period were associated with scams, often involving seniors who were pressured into transferring their savings via Bitcoin kiosks.

Prosecutors in this case assert that the firm imposed undisclosed fees as high as 26%, while neglecting to implement effective precautions against fraud.

Federal reports highlight a sharp rise in monetary losses connected to cryptocurrency ATMs. The FBI recorded almost 11,000 complaints relating to these ATMs in 2024, totaling more than $246 million.

Legislative Response: New Regulations

Data from the Federal Trade Commission reveals that losses increased from $12 million in 2020 to $114 million in 2023, with individuals aged 60 and older making up over two-thirds of the reported cases. On average, victims in this age group suffered median losses of $10,000 per incident.

In response to these issues, lawmakers are proposing new legislation. Senator Dick Durbin introduced the “Crypto ATM Fraud Prevention Act” in February, which aims to impose transaction limits, necessitate direct communication with users for high-value transfers, and mandate refunds for specific fraud victims.

Durbin emphasized that the measure seeks to mitigate scams that often employ intimidation tactics against seniors.

Several states are considering similar regulations. Recently, Wisconsin legislators proposed bills to require the state’s more than 580 crypto kiosks to adhere to money transmitter licensing requirements.

This proposal aims to impose daily transaction caps, enforce stricter identity verification processes, and mandate fraud warnings on the machines.

Spokane, Washington, has also opted for an outright ban on crypto ATMs following federal investigations that tied kiosks in the area to extensive fraud operations.

Globally, regulatory bodies have taken similar actions. New Zealand has enacted a complete ban on cryptocurrency ATMs as part of enhanced anti-money laundering measures, while Australia’s financial intelligence agency has introduced tougher regulations and opted not to renew registration for a local operator.