Federal Court Rules in Favor of Bitcoin Depot and Circle K, Orders Arbitration in Scam Case
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On Thursday, February 27, 2025, the United States District Court for the District of South Carolina dismissed a case involving Glenda J. Mooneyham and Bitcoin Depot, Inc., along with its marketing partner Circle K Stores, Inc. The court granted motions to compel arbitration filed by the defendants, effectively halting Mooneyham’s class action lawsuit.
Mooneyham, acting on behalf of herself and a proposed class of similarly affected individuals, alleged that she was a victim of a cryptocurrency ATM scam. The 73-year-old widow claimed that, on November 15, 2023, she received a phone call from imposters posing as representatives from her bank and the Federal Trade Commission (FTC). According to court documents, the scammers informed her that her bank account had been compromised and instructed her to withdraw cash to protect her funds.
Following the alleged scam, Mooneyham withdrew $15,000 from her savings account and deposited it into a Bitcoin Depot ATM located at a Circle K store in Lexington, South Carolina. The plaintiff claimed that the ATM was part of a scheme targeting elderly individuals, and that Circle K employees failed to warn her about the potential fraud. Within 48 hours, she withdrew another $15,000 under the same pretense and deposited it into the same Bitcoin Depot ATM.
Mooneyham’s lawsuit, originally filed in the Richland County Court of Common Pleas, included several allegations against both Bitcoin Depot and Circle K. She sought to bring a class action on behalf of all individuals who suffered damages due to the alleged negligence of the defendants in relation to the use of Bitcoin Depot ATMs.
The defendants filed motions to compel arbitration, arguing that Mooneyham had agreed to their Terms and Conditions, which included an arbitration provision, when she used the Bitcoin Depot ATM. The Terms and Conditions stated that all claims arising under the agreement would be resolved through arbitration, following the rules set by the American Arbitration Association. The court found that Mooneyham had explicitly accepted these terms when completing her transactions at the ATM.
In her response to the motions, Mooneyham contended that her acceptance of the Terms and Conditions was made under duress, claiming that she was not in a position to voluntarily agree to the terms due to the stressful circumstances of the scam. However, the court concluded that the evidence supported the existence of a valid arbitration agreement, which compelled it to enforce the arbitration clause.
The court applied a four-factor test to determine whether the elements required to compel arbitration were met. It found that there was a dispute between the parties, a written agreement that included an arbitration provision, a connection between the transaction and interstate commerce, and that Mooneyham had refused to arbitrate by filing her lawsuit.
The court ruled that the arbitration clause in the Terms and Conditions was enforceable and covered the claims made by Mooneyham. Consequently, the court dismissed the complaint without prejudice, meaning that the case could be brought again if necessary, following arbitration.
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