TL;DR:
- CoinFlip was sued in Missouri for facilitating fraudulent transactions through crypto ATMs that harmed elderly residents and military veterans.
- The state’s attorney general seeks to block CoinFlip’s operations in Missouri and impose civil penalties of up to $1.826 billion.
- The lawsuit is part of a broader offensive against crypto ATM operators across multiple U.S. states.
The state of Missouri filed a lawsuit against CoinFlip, the cryptocurrency ATM operator that manages 136 kiosks in the state and more than 4,200 across the country.
The lawsuit was announced by the office of Attorney General Catherine Hanaway and targets GPD Holdings, the company that operates under the CoinFlip brand. Authorities accuse the company of having intentionally facilitated transactions linked to scams that allegedly harmed vulnerable residents, including elderly adults and military veterans.
What Happened with CoinFlip?
According to the lawsuit, CoinFlip’s operations allegedly violated Missouri’s Merchandising Practices Act by processing transactions tied to fraudulent schemes. The state is asking the court to ban the company from operating in Missouri, impose civil penalties of up to $1.826 billion, and ensure restitution for affected consumers over the past five years. The investigation into several crypto ATM operators was launched in December of last year, following the receipt of fraud-related complaints.
Crypto ATMs Under Scrutiny
The lawsuit against CoinFlip is part of an offensive that affects the entire cryptocurrency ATM industry in the United States. Legislators and regulators across multiple states have introduced restrictions, stricter compliance rules, and even outright bans on these devices, amid growing concerns over fraud and the lack of consumer protection. Minnesota is currently considering legislation that could ban crypto kiosks entirely following a surge in scam reports.
Another company under investigation in Missouri, Bitcoin Depot, faces an even more critical situation. The company warned the U.S. Securities and Exchange Commission that there was a “substantial doubt” about its ability to continue operating, and days later filed for bankruptcy protection under Chapter 11 in Texas. The regulatory and judicial pressure on the sector shows no signs of easing.
