Washington Shuts Down Crypto ATM that Claimed $8 Million in User Funds as Income
Washington state regulators have ordered CoinMe to halt all money transfer activities after accusing the crypto ATM operator of misusing more than $8 million in customer funds as its own income.
The Department of Financial Institutions (DFI) issued an emergency cease and desist order on December 1, citing “unsafe and unhealthy practices.”
DFI said CoinMe failed to protect the money consumers paid for crypto vouchers. Instead, the company allegedly counted unclaimed or expired coupon balances as income.
Customers purchased coupons from CoinMe kiosks but never redeemed them, according to the filing. Washington law requires companies to keep these funds as consumer property or turn them over as unclaimed assets.
But DFI says CoinMe treats the balances as corporate income. The regulator argues this harms consumers and disrupts the company’s financial health.
Due to these findings, DFI ordered CoinMe to cease all money transfer and kiosk-related operations in the state. The company cannot accept new funds from Washington consumers under the order.
Officials also said they would pursue compensation for affected customers. The agency has signaled plans to revoke CoinMe’s state money transmission license.
The cease and desist order also lists several other violations. These include failure to maintain required net worth, keeping inaccurate records, and submitting incorrect applications.
DFI also noted that some CoinMe coupons show a support phone number that no longer works. The regulator said this contributed to weak consumer protection.
This action marks one of the most serious sanctions imposed by the government against a US crypto ATM operator. CoinMe operates one of the largest cash-to-crypto networks in the country.
The case highlights the increasing scrutiny on crypto on-ramps that deal with physical cash. Regulators expect these companies to comply with the same standards as traditional money transmitters.
CoinMe may appeal the decision, but Washington regulators appear ready to escalate the case. If the government revokes the company’s license, CoinMe would lose the ability to operate any money transfer services in Washington.
In the meantime, DFI asked affected customers to prepare for potential refund claims. It was stated that the agency’s priority is to protect consumers who rely on licensed firms to manage their money safely.
Read original story Washington Shuts Down Crypto ATM That Claimed $8 Million in User Funds By Muhammad Shahid beincrypto.com
