Lotto Beer Bitcoin

The crypto ATM in your corner store may be used for laundering money.

- Tom Schoenberg & Matt Robinson

In the hours before dawn, a team of former U.S. Army Rangers snakes its way through the streets of Manhattan to Apollo Deli & Fruit, which sits on a corner in Harlem, one block away from its name sake, the Apollo Theater. The store looks like most bodegas in New York City, but beneath an ad for Boar’s Head cold cuts is a sign that reads “Keep Calm and Buy Bitcoins Here.” And then, next to a tower of Lay’s potato chips, sits what looks like an ATM.

Three of the men, looking like plainclothes police officers, head directly to the machine. While two of them keep lookout, one uses a key to pop open the front lid, revealing a small keypad. He punches in some numbers, and the machine opens up, presenting him with a white plastic box containing several thousand dollars in cash. He puts the box into a duffel bag, places an empty one back into the slot, and within minutes the men are back in their car. By 8 a.m., the bag will hold almost $300,000: one night’s haul from more than two dozen Bitcoin ATMs, or BTMs, owned by Cottonwood Vending LLC, a New York-based operator.

The company—growing fast, full of promise— now operates 91 machines, which allow just about anyone to buy Bitcoins with cash, in New York, making it the biggest purveyor in the city. It has 13 employees and gross annual revenue exceeding $35 million—about $385,000 in cash per machine, according to court records. It’s awaiting approval from New York’s banking regulator for a BitLicense, a special permit for Bitcoin-focused companies.