Crypto ATM Giant Coinme Slapped With $300K Fine for Breaking California Limitations– What’s Next?
The California Department of Financial Security and Development (DFPI) has fined Seattle-based Crypto ATM company, Coinme, Inc. $300,000 for violating the state’s recently enacted Digital Financial Assets Law (DFAL). According to journalism release, the penalty marks the very first enforcement action under the law, which worked in 2023 to boost oversight of digital property companies. Coinme operates a network of cryptocurrency kiosks, likewise called crypto ATMs, at various retail places throughout California. These devices enable consumers to buy and sell digital assets using cash or debit cards. However, according to DFPI, Coinme broke the rules by allowing transactions that exceeded the daily limit of $1,000 per customer, a clear breach of DFAL provisions. In addition to surpassing transaction limits, the DFPI discovered that Coinme failed to supply required transaction disclosures on consumer receipts, another offense of the state’s digital financing regulations.
Under an authorization 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 avoid 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 fraudsters from taking advantage of unsuspecting Californians,” stated 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 through these machines.
Meanwhile, this is not the first time the state will go after crypto company. In May, the California DFPI and Department of Justice collaborated to combat crypto scams, shutting down 26 fraud websites with the aid of a widely used Crypto Scam Tracker tool. Based on consumer complaints, the tool has helped uncover $4.6 million in losses related to deceptive schemes. California regulators received 2,668 complaints from residents through its ‘Crypto Scam Tracker’ tool, leading to identify 7 new scam schemes.
In 2023, Californians lost around $1.2 billion to crypto scams, according to the FBI. Specifically, the DFPI received 2,668 complaints, resulting in the discovery of seven new scam 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 introduce a pilot program allowing state agencies to accept digital assets for fee payments. Introduced by Assemblymember Avelino Valencia, the bill also mandates that DFPI submit a detailed report by January 1, 2028, assessing 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 companies 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.
The post Crypto ATM Giant Coinme Slapped With $300K Fine for Breaking California Limitations– What’s Next?
