UPDATES & ANALYSIS

Iowa Supreme Court rules that 2025 Bitcoin ATM refund law does not apply to earlier scams.

by Samuel Province | November 12, 2026

In an opinion filed Oct 30, 2026, the Iowa Supreme Court reversed a district court’s order in In the matter of $11,500 Seized from Bitcoin Depot Operating, LLC, which denied a Bitcoin ATM operator’s request to recover $11,500 that had been seized by the police. The case was submitted on Sept. 10, and Justice Waterman wrote for a majority of the Court, joined by Chief Justice Christensen, Justice Mansfield, and Justice McDermott. The question before the Court was whether Iowa Code section 533C.1004, the 2025 statute which requires Bitcoin ATM operators to refund victims of fraud, applied to a request for return of seized property when the fraud had occurred prior to the law taking effect.

[Disclosure: Nyemaster Goode attorneys Matthew A. McGuire and Roy Leaf represented the appellant in this matter.]

In 2024, scammers got VanderWerf to put $11,500 into a Bitcoin Depot ATM and send it to a digital wallet outside of his control. He agreed to Bitcoin Depot’s terms of service, which made the cash the property of Bitcoin Depot. The cash was seized by police, the Bitcoin was never recovered, and no charges were brought. In May 2025, the Iowa Legislature enacted section 533C.1004, which limits deposits, requires refunds to qualifying fraud victims, and imposes civil penalties. Section 533C.1004 contains no retroactivity clause. Bitcoin Depot applied under Iowa Code section 809.5 for the cash to be returned, and the district court found that since section 533C.1004(8) was in effect when the application was made, VanderWerf’s refund defeated Bitcoin Depot’s claim. A different judge later released the cash to VanderWerf by agreement with the State, and Bitcoin Depot did not receive notice of this separate proceeding.

Bitcoin Depot contended that section 533C.1004 was not retroactive, and that even if VanderWerf did have the right to a refund, that it wouldn’t entitle him to the specific cash that was seized in this case. Conversely, the State argued that the law was applied prospectively, because the event was VanderWerf’s request for a refund in 2025, rather than his deposit in 2024.

The Court reasoned that the district court applied the law retroactively by attaching new consequences to a past act. Indeed, in 2024, Bitcoin Depot would have had no duty to refund victims of fraud, but under the district court’s ruling, it lost $11,500 due to an event that happened before the law existed, noting that the district court “changed the rules after the game was played.” It explained that the legislature did not intend for the law to apply retroactively by analyzing its text, and the Court noted changes to other parts of the statute to make them retroactive that were not made here.

Justice Oxley filed a concurring opinion, joined by Justices McDonald and May, stating that she would not have reached retroactivity at all, because the fraud victim would have, at most, an unsecured claim against the operator rather than an interest in the specific cash. So, the cash had to be returned to Bitcoin Depot regardless of when the law became effective.

Tags: Iowa Supreme Court 2026-27