Coinme in Hot Water: Crypto ATM Titan Fined $300K for Defying California Regulations—What’s Next?
Crypto ATM heavyweight Coinme just got smacked with a $300,000 penalty—California doesn’t take kindly to rule-breakers. Here’s the breakdown.
The Violation:
Pushing limits (literally). State regulators caught Coinme flouting transaction caps designed to curb money laundering and protect consumers. Whoops.
The Fallout:
A fine hefty enough to make even a crypto bull wince. But let’s be real—in an industry that treats compliance like an optional NFT, this is barely a speed bump.
What’s Next?
Watch for tighter scrutiny on ATMs. Or, knowing crypto, a pivot to some decentralized workaround that ‘disrupts’ pesky things like laws.
*Bonus finance jab:* Nothing says ‘trust us with your money’ like a six-figure regulatory slap. Stay classy, crypto.
California Regulators Send a Clear Message About Crypto ATM
Under a consent order, Coinme agreed to pay the $300,000 fine, which includes $51,700 in restitution to an elderly California resident who was exploited in a crypto scam facilitated through one of the company’s kiosks.
The company must also implement operational changes to ensure compliance and prevent future violations.
DFPI Commissioner KC Mohseni emphasized that the enforcement action aims to set a precedent.
“This enforcement action should send a strong message to kiosk operators that California means business when it requires digital asset companies to follow the rules that help prevent scammers from taking advantage of unsuspecting Californians,” said Mohseni.
The DFAL was specifically designed to address growing fraud involving crypto kiosks, which have become a tool for scammers targeting vulnerable groups, especially older adults.
Victims are often tricked into transferring funds directly into scammers’ digital wallets via these machines.
Meanwhile, this is not the first time the state will go after crypto service providers. In May, the California DFPI and Department of Justice teamed up to fight crypto fraud, shutting down 26 scam websites with the help of a widely used Crypto Scam Tracker tool.
Based on consumer complaints, the tool has helped uncover $4.6 million in losses linked to fraudulent schemes.
California regulators received 2,668 complaints from residents through its ‘Crypto Scam Tracker’ tool, that led to identify 7 new scam schemes.#CryptoScam #CryptoFraud #CaliforniaDFPIhttps://t.co/GEhyLAXURy
In 2023, Californians lost around $1.2 billion to crypto scams, according to the FBI. Notably, the DFPI received 2,668 complaints, leading to the discovery of seven new fraud cases.
California Crypto Regulations and Licenses Take Shape
California is moving closer to embracing cryptocurrency in public finance with the unanimous passage of Assembly Bill 1180.
Approved by the State Assembly on June 2, the bill authorizes the Department of Financial Protection and Innovation (DFPI) to launch a pilot program allowing state agencies to accept digital assets for fee payments.
California Assembly unanimously approves crypto payments bill. AB-1180 now heads to the Senate. #crypto #Californiahttps://t.co/HCk96E5CxN
Introduced by Assemblymember Avelino Valencia, the bill also mandates that DFPI submit a detailed report by January 1, 2028, evaluating crypto transaction volumes, regulatory challenges, and recommendations. The program will sunset on July 1, 2031.
In addition, AB-1180 establishes the Digital Financial Assets Law, requiring businesses to obtain a DFPI license by July 1, 2025, to operate in the crypto space. It also sets rules for consumer protection and stablecoin use.
While the bill doesn’t mandate crypto adoption, it empowers DFPI to explore secure, efficient digital payment systems, positioning California as a potential leader in public-sector crypto integration.
