In short
- California’s Department of Financial Protection and Innovation (DFPI) has fined Coinhub $675,000 for violating the digital assets law.
- Of that total, $105,000 is due in refunds to consumers who were overcharged by the ATM operator.
- This marks the regulator’s fourth enforcement action, which is cracking down on crypto ATM operators it says are taking advantage of consumers.
The California Department of Financial Protection and Innovation (DFPI) has fined Bitcoin ATM operator Coinhub $675,000 for overcharging customers, the regulator announced Friday.
The fine includes $105,000 paid in restitution to California consumers who were charged more than the maximum allowable fee and charges for using crypto ATMs.
“Crypto kiosk operators in California are aware that we intend to root out bad actors and scammers who are putting consumers’ hard-earned money at risk,” DFPI Commissioner KC Mohseni said in a statement. “We welcome legitimate operators to this sector, but DFPI will not tolerate those who flout the law and fail to implement required safety measures for customers.”
As part of its investigation, DFPI found that LSGT Services, LLC – doing business as Coinhub – charged markup fees above the maximum since 2024, accepted cash transactions above the $1,000 daily limit, omitted key information about receipts, and failed to provide legally required disclaimers before transactions.
The regulator’s recent enforcement action is the fourth in recent months against crypto ATM operators, as it works to warn those violating California rules. Digital Financial Assets Act (DFAL).
In June, the DFPI took its first enforcement action for DFAL violationsfining Bitcoin ATM operator Coinme $300,000 for violations, $51,700 of which was earmarked as refunds to customers in California.
Other jurisdictions have also cracked down on crypto ATM operators. The city council in Spokane, Washington voted unanimously to ban the kiosks because of the increase in fraud and financial crime.
New Zealand also banned crypto ATMs in Julyciting growing concerns about financial crime. Earlier this week, police in Massachusetts warned their citizens afterward two residents lost nearly $7,000 total of Bitcoin ATM scams using a new scheme claiming payments were due for missing jury duty.
In August, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). has issued an urgent warning about the use of Bitcoin ATMs in scams and their specific effect on older Americans. An FBI report shows that the demographic lnearly $3 billion lost to crypto fraud in 2024, despite accounting for only about 17% of the population.
Representatives for DFPI and Coinhub did not immediately respond Declutter request for comment.
Daily debriefing Newsletter
Start every day with today’s top news stories, plus original articles, a podcast, videos and more.
