Kiosk Crypto Crackdown: Coinme Fined $300K

SACRAMENTO, California – Coinme, a cryptocurrency kiosk company, has been penalized $300,000 by the California Department of Financial Protection and Innovation (DFPI) for violating regulations concerning crypto kiosks.

The DFPI has officially announced a consent order with Coinme, based in Seattle. This order addresses the company’s failure to comply with California’s Digital Financial Assets Law (DFAL).

Coinme’s business model involves operating cryptocurrency kiosks throughout California, often located within grocery stores and convenience stores. These kiosks allow customers to exchange cash, or other payment methods, for digital currencies. According to the DFPI’s investigation, Coinme infringed upon the DFAL’s rules. Specifically, the kiosks exceeded the transaction limit, which prevents crypto kiosks from processing transactions exceeding $1,000 per customer, per day. Moreover, the DFPI stated that Coinme neglected to include necessary disclosures on customer receipts, as required by law.

As part of the consent order, Coinme has committed to paying the $300,000 penalty, including $51,700 in restitution directed to an older resident of California. The company is also obligated to put in place updated protocols to address the noted violations and prevent future occurrences. The DFPI emphasized that this consent order is the first enforcement action under DFAL.

KC Mohseni, the DFPI Commissioner, remarked, “This enforcement action serves as a clear warning to kiosk operators. California is serious about enforcing regulations for digital asset companies. These rules are put in place to protect Californians from falling victim to scams and exploitation.”