Crypto ATM Giant Coinme Slapped With $300K Fine for Breaking California Limits—What’s Next?

The California Department of Financial Protection and Innovation (DFPI) has fined Seattle-based Crypto ATM firm, Coinme, Inc. $300,000 for violating the state’s recently enacted Digital Financial Assets Law (DFAL).

According to the press release, the penalty marks the first enforcement action under the law, which took effect in 2023 to enhance oversight of digital asset companies.

Coinme operates a network of cryptocurrency kiosks, also known as crypto ATMs, at various retail locations across California. These machines allow customers 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 exceeding transaction limits, the DFPI found that Coinme failed to provide required transaction disclosures on customer receipts, another violation of the state’s digital finance regulations.

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.

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.

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.

The post Crypto ATM Giant Coinme Slapped With $300K Fine for Breaking California Limits—What’s Next? appeared first on Cryptonews.