Man recovers savings lost in a Bitcoin scam

A Hartford man who lost his life savings in a Bitcoin scam is among four Connecticut residents to get their money back as part of a recent settlement between the state’s Department of Banking and the cryptocurrency company Bitcoin of America.

In 2021, Joe Samuels, an artist in his early 80s, deposited $20,000 into a Bitcoin ATM at a convenience store near his Hartford apartment under instruction from scammers, who had convinced him the money didn’t belong to him. Police recovered the cash from the ATM, but a judge ruled that it legally belonged to Bitcoin of America, which owned the ATM.

CT Insider wrote about Samuels’ case in March, and CBS News profiled him shortly after. Meanwhile, executives from Bitcoin of America were arrested in Ohio and charged with conspiracy, money laundering, receiving stolen property and more, after police found they operated more than 50 unlicensed kiosks there.

Then several weeks ago, Samuels’ son Jason, who had advocated tirelessly for his father to an array of state agencies, received an email from the Department of Banking asking him for an address to send a restitution payment. Soon after, $20,000 arrived in the mail.

“My father was pleasantly surprised. It’s just a big weight off his shoulders,” Jason Samuels said Tuesday. “It was a lot of money that he thought had been lost, and he’s thankful that others hopefully won’t fall pray to the same sort of unregulated banking endeavor.”

As part of the settlement between the Department of Banking and Bitcoin of America, announced publicly this past week, the company repaid four Connecticut residents a total of $86,000 and agreed to wind down operations in the state. In a statement, the Department of Banking said Bitcoin of America had been operating kiosks without a proper license.

“This case highlights the need to be cautious when using virtual currency kiosks,” banking commissioner Jorge Perez said in a statement. “Scammers are preying upon consumers’ vulnerabilities and tricking them into depositing cash into kiosks, which can be found throughout the state.”

Critics say that Bitcoin ATMs, which allow consumers to purchase virtual currency, lend themselves to scams because they redirect cash to third parties through transactions that are highly difficult to trace. Though Bitcoin of America and other similar companies are not themselves propagating scams, critics allege, they willingly profit from them, while doing little to protect consumers.

Bitcoin of America did not respond to a request for comment Tuesday.