Law enforcement authorities in the United States have taken possession of 18 cryptocurrency ATMs from Coindawg LLC, a company that allegedly acquired them with funds obtained fraudulently from the state.
Coindawg founder Charles Riley Constant has been accused of applying for loans from the U.S. Small Business Administration (SBA) under false pretenses.
These loans were intended to help small businesses that were affected by the COVID-19 pandemic. Since late 2020, Constant and his associates allegedly used fabricated documents and fake companies to secure seven loans worth more than $1 million.
Reportedly, Constant utilized nearly $700,000 of these funds to purchase bitcoin from the New York-based cryptocurrency exchange.
Furthermore, Constant is believed to have set up a cryptomat manufacturing enterprise, which he used to launder money.
According to the prosecutor’s office, over $3 million worth of cryptocurrencies have been traded through Coindawg to date, with a 15% service charge applied.
As part of their investigation, law enforcement officials seized 18 cryptocurrency ATMs owned by Constant in Texas and Oklahoma. If convicted, Constant could face a 20-year prison sentence for money laundering conspiracy, as well as 10 years for illegally acquiring and misusing public funds.
As per data from Coin ATM Radar, the number of cryptomats worldwide decreased by 412 devices in the first two months of 2023. However, Australia and Poland have emerged as the top countries globally for cryptomat installations.