Missouri authorities filed a lawsuit against CoinFlip, a major cryptocurrency ATM operator, accusing the company of knowingly enabling fraudulent transactions and profiting from scams that targeted vulnerable residents, including seniors and military veterans. The lawsuit was announced by the office of Missouri Attorney General Catherine Hanaway. State officials claim that CoinFlip's operations, conducted through parent company GPD Holdings, violated the Missouri Merchandising Practices Act by facilitating transactions connected to scams. The lawsuit is part of a broader regulatory crackdown on crypto ATM operators across the United States.
Lawsuit Details and Penalties
Missouri authorities are asking the court to block CoinFlip from operating in the state and impose civil penalties of up to $1.826 million. Additionally, the lawsuit seeks restitution for consumers who allegedly lost money through fraudulent crypto ATM transactions over the past five years. The investigation into CoinFlip and other crypto ATM operators was launched in December after the state received complaints tied to fraudulent schemes involving digital currency kiosks.
CoinFlip's Operational Footprint
CoinFlip currently operates 136 cryptocurrency kiosks in Missouri and more than 4,200 nationwide, according to information listed on the company's website. Crypto ATMs allow users to buy or sometimes sell cryptocurrencies like Bitcoin using cash or debit cards.
Broader Regulatory Crackdown
The lawsuit against CoinFlip is part of a wider regulatory response to concerns over fraud and consumer protection. Over the past several months, lawmakers and regulators have introduced restrictions, tighter compliance rules, and in some cases outright bans on crypto kiosks. Minnesota lawmakers are also now considering legislation that could ban crypto kiosks after a rise in scam reports.
Another major crypto ATM operator, Bitcoin Depot, faced mounting legal and financial pressure. In a filing submitted to the US Securities and Exchange Commission earlier this month, the company warned that there was "substantial doubt" about its ability to continue operating due to ongoing litigation and legal liabilities. Bitcoin Depot subsequently filed for Chapter 11 bankruptcy protection in Texas.
