Regulators Direct Bitcoin ATM Company Coinme to Return $8 Million and Stop Operations

The Washington state Department of Financial Institutions (DFI) has ordered Coinme, a Bitcoin ATM operator, to cease all money transmission services and repay over $8 million to customers. The DFI's investigation revealed that Coinme unlawfully converted customer funds into corporate revenue. This regulatory action could result in severe penalties for Coinme, including potential loss of its operating license.

Key Takeaways

The DFI has ordered Coinme to halt operations and repay $8 million to customers.
The order accuses Coinme of illegally converting unredeemed vouchers into corporate revenue.
Coinme faces potential license revocation, substantial fines, and a possible industry ban.
This situation highlights increasing regulatory scrutiny over cryptocurrency businesses.

Coinme Faces Regulatory Action

On December 1, 2025, Washington state's Department of Financial Institutions (DFI) issued a Temporary Cease and Desist Order against Coinme, an operator of Bitcoin ATMs. The order requires Coinme to stop all money transmission services and mandates the repayment of over $8 million to customers. The DFI alleges that the Seattle-based company improperly converted unredeemed customer funds into revenue for its own use.

According to the DFI, the investigation uncovered that Coinme required customers to buy paper vouchers at its kiosks and then redeem them online. When these vouchers went unredeemed within a certain period, Coinme allegedly claimed the unpaid balances as income, violating the state's Uniform Money Services Act.

"Washington’s money transmission laws are designed to safeguard consumers who depend on licensed companies for secure fund transfers," emphasized DFI Director Charlie Clark.

Potential License Loss for Coinme

The order also reveals that between 2020 and 2025, Coinme did not maintain the legally mandated tangible net worth, submitted incorrect reports, and failed to clearly disclose redemption timeframes to its users.

As a result, Coinme may face the revocation of its state money transmitter license, a $300,000 penalty, and a potential 10-year ban from the industry for both the company and its CEO, Neil Bergquist. Coinme has a period of 20 days to request a hearing before the order is finalized.

In a response, Coinme's Chief Compliance Officer Ben Enea stated that the company is cooperating with the regulators.

Implications for the Cryptocurrency Landscape

This action against Coinme represents a notable escalation in the regulatory oversight targeting crypto-to-fiat gateways. Institutional desks are particularly concerned about the implications for customer fund management, as this case sets a precedent for how unclaimed crypto assets are treated.

Regulators are clearly moving away from tolerating the classification of unclaimed crypto assets as excess revenue. This initiative places additional pressure on all consumer-focused cryptocurrency services to enhance their accounting practices, escheatment processes, and transparency in disclosures, potentially affecting profit margins across the sector.