Polygon in Talks to Acquire Bitcoin ATM Provider Coinme for $100M to $125M

Polygon, the Ethereum Layer-2 network, is reportedly considering the acquisition of Coinme, a US Bitcoin ATM provider, with the expected deal valued between $100 million and $125 million. Coinme, which has faced regulatory challenges recently, has established itself as a major player in the Bitcoin ATM market.

Key Takeaways

Acquisition Plans: Polygon is looking to buy Coinme for $100M to $125M.
Industry Impact: Coinme is a significant Bitcoin ATM provider with over 50,000 locations in the US.
Regulatory Issues: Coinme is currently dealing with regulatory actions from Washington state.
Funding Strength: Polygon has a solid financial backing, having raised $450 million in a recent funding round.

Polygon Coinme

Main Content

Ethereum's Layer-2 network, Polygon, is reportedly in discussions to acquire Coinme, a Bitcoin ATM service provider in the United States. The acquisition is estimated to be between $100 million and $125 million, according to trusted sources who informed CoinDesk. Architect Partners is reportedly advising Polygon on this financial transaction.

Coinme has been a pioneer in the Bitcoin ATM space since launching its first kiosk in the US in 2014. Presently, it operates over 50,000 Bitcoin ATM locations across 49 states, making it one of the largest networks for cryptocurrency transactions in the country.

Coinme's Legal Woes

Recently, Coinme encountered regulatory challenges when the Washington state Department of Financial Institutions (DFI) ordered the company to stop all money transmission services. The regulator claims that Coinme illegally converted unclaimed customer funds into corporate profits.

As part of the regulatory actions, Coinme has been instructed to repay more than $8 million to its customers. The company had been encouraging customers to purchase paper vouchers at their kiosks to redeem online. However, Coinme reportedly claimed the remaining balances of vouchers that weren't redeemed within a specific period as company income.

In light of these allegations, Coinme faces significant consequences, including the potential revocation of its operating license, a $300,000 fine, and a possible 10-year industry ban affecting both the company and its CEO, Neil Bergquist.

For Polygon, acquiring Coinme could serve as a strategic move to enhance its services in the cryptocurrency sector, particularly given its recent success in raising $450 million in a funding round led by Sequoia Capital India.

The outcome of this acquisition could have a lasting impact on both companies and the broader cryptocurrency industry as they navigate the challenges and opportunities in the growing market.