Stolen Bitcoin ATM Owners Suspect Memphis Robbery Was Inside Job

Tennessee-based BitKing LLC, a Bitcoin ATM provider who started operating last November with just one machine in downtown Memphis, has suffered their first burglary. After the story went viral on Reddit, CCN reached out to Sean Pezeshk, the company’s primary operator, for more information about the stolen machine.

The Bitcoin ATM Was The Target

The Bitcoin ATM was the thief's only target, even though there were plenty of other luxury items in the store. | Source: Shutterstock

Pezeshk, who together with Josh Roberts runs BitKing, says that on a recent Tuesday night, the ATM, which is normally located at Railgarten on Central Avenue in Memphis, was hijacked. The ATM was the only target, even though the thief could have stolen expensive liquor and other items. The burglar stole the ATM shortly after the last employee left. BitKing believes they were watching the place closely.

It was located the next morning at a nearby dog park. Memphis police are investigating the robbery, but unfortunately, they don’t have much to go on. Obviously, fingerprints from the device would be inconclusive at trial – and they didn’t find many hits from that anyway.

The bar has a security system, but the ATM is located in an area where no cameras pointed. The bar's glass door was broken in pursuit of the ATM. BitKing had no insurance on the device, but the manufacturer, General Bytes, is “super friendly,” Pezeshk said. The company is going to do its best to keep the repair costs low, but some parts are not made by General Bytes, such as the cash receiver.

Crypto ATM Should Be Back in Business Soon

Interestingly, several hours before the theft, someone conducted five separate $100 transactions. Pezeshk says this is interesting because BitKing charges both a flat fee and a percentage on transactions. Therefore, it would have made more sense for the user to do one $500 transaction. Fortunately, the company withdrew the cash before the bar closed.

BitKing’s single ATM will be back in operation sometime in the next few weeks. Pezeshk says he doesn’t foresee any problems with the bar’s owners in re-opening operations, despite the incident.

The device offers non-KYC transactions up to $500 in Bitcoin, Bitcoin Cash, Ethereum, and Monero. They have been doing between $500 and $1,000 a week consistently since opening, with occasional larger purchases. BitKing provides the cryptocurrency themselves. Obviously, they store it in a separate location. A server executes the delivery after the transaction happens at the cryptocurrency ATM.

BitKing Suspects Inside Job or Buyer's Remorse

BitKing could suffer up to $3,500 in losses due to the crypto ATM theft. | Source: AP Photo/Kin Cheung

On a separate note, Railgarten was robbed in November 2017. According to Pezeshk, that robbery was an inside job.

In his mind, there are two primary suspects for the most recent theft: either the person who made the five separate $100 transactions or some kind of inside conspiracy led by an employee who noticed the money go into the ATM.

He speculates:

"They knew it was an inside job because the guy was on a cell phone taking directions and using codes to open the safe. Obviously we don’t have enough information to accuse anyone at this time."

Either way, the liability for BitKing is up to the full value of the machine, which cost them about $3,500 when they started the business.

As a result of the attention the incident has received, however, a competing manufacturer, Vault Logic, has reached out to BitKing. BitKing is just an ATM company, so they may operate with multiple brands of Bitcoin ATMs.

The incident has put a damper on their expansion plans, but the success so far makes them willing to continue.

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P. H. Madore @bitillionaire

P. H. Madore has written for CCN since 2014. Please send breaking news tips or requests for investigation to bitillionaire+phm@gmail.com. He lives in Maine, USA. A single father of four young children, he does not discourage financial donations, provided they do not come with strings attached.

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