A Georgia inmate is accused of a crypto scheme, allegedly convincing an elderly East Texas woman to deposit $13,000 into a Bitcoin kiosk by falsely telling her she would be arrested if she did not pay.

The case is now prompting the Smith County Sheriff’s Office to push for a local ban on crypto kiosks.

What happened?

According to KNUE, the Smith County Sheriff’s Office said an elderly woman in Lindale, Texas, reported a theft on March 31 after a caller falsely claimed she had failed to respond to a subpoena.

Investigators said the scammer used the name of an actual sheriff’s office employee, appeared to call from a 903 number, and sent texts demanding $13,000 while directing the woman to a Bitcoin kiosk in Tyler. Authorities said she followed those instructions and sent the full amount.

The investigation drew assistance from several agencies, including the U.S. Secret Service. KNUE reported that investigators later identified the suspect as Marcus Allen Daniels, a Georgia inmate at Wheeler Correctional Facility who has prior armed robbery convictions.

During an April 14 shakedown of Daniels’ cell, correctional officials allegedly found a cellphone. Investigators said the device contained messages referencing Bitcoin wallet numbers and payment methods.

An arrest warrant has since been issued with a $1 million bond, although Daniels is already serving a 20-year prison sentence in Georgia. The victim’s money has not been recovered.

Why is this scam concerning?

Cases like this underscore how crypto kiosks can be used to move money quickly, making it extremely difficult for victims to undo.

Law enforcement agencies across the country have repeatedly warned that scammers often impersonate police, courts, banks, or government offices to create panic and pressure people into making immediate payments. Cryptocurrency can make that problem even worse because once the funds are sent, they are often much harder to trace or recover than money sent through traditional banking channels.

Older adults are particularly vulnerable to these high-pressure tactics. A caller using a local number, the name of a real employee, and threats of arrest can create enough urgency and confusion that a victim acts before verifying whether the demand is legitimate.

At the same time, this case does not mean cryptocurrency is inherently criminal. Digital assets and blockchain technology have legitimate uses, and some companies argue that crypto can support financial innovation and even investment in cleaner energy infrastructure.

But the industry also faces serious criticism, including fraud risks and, in the case of some cryptocurrencies such as Bitcoin, heavy energy use tied to mining. That mix of potential and risk is one reason lawmakers and regulators continue to debate how the space should be overseen.

What’s being done about crypto kiosk fraud?

In Smith County, officials are now seeking a ban on local cryptocurrency kiosks, arguing that the machines have become a common tool in scams like this one. According to KNUE, the sheriff’s office pointed to similar efforts in Indiana, Minnesota, and Tennessee. Spokane Valley is moving to shut them down amid a growing number of scams.

Stronger consumer protections could help limit the damage from these schemes. That could include clearer warning messages on kiosks, tighter transaction limits, stronger identity verification, and faster coordination between kiosk operators and law enforcement when suspicious transfers are reported.

For individuals, the most important safeguard is understanding that legitimate law enforcement agencies do not demand payment through Bitcoin or any other cryptocurrency to avoid arrest.

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