The Washington state Department of Financial Institutions (DFI) has taken decisive action against Coinme, a prominent Bitcoin ATM operator, mandating the company to cease all money transmission services and repay over $8 million to its customers. This Temporary Cease and Desist Order, issued on December 1, 2025, follows allegations that the Seattle-based firm illegally converted unredeemed customer funds into corporate revenue, a violation of the state’s Uniform Money Services Act.
The DFI’s investigation uncovered that Coinme required customers to purchase paper vouchers from its kiosks, which were to be redeemed online. When these vouchers went unredeemed within a specified timeframe, Coinme allegedly claimed the outstanding balances as its own income. DFI Director Charlie Clark emphasized the importance of compliance with money transmission laws, noting, “Washington’s money transmission laws exist to protect consumers that rely on licensed companies to safely transmit funds.”
In addition to the immediate repercussions of halting its operations, Coinme is now facing serious consequences, including the potential revocation of its state money transmitter license. The company could incur additional penalties, such as a $300,000 fine and a 10-year ban on industry participation for both the firm and its CEO, Neil Bergquist. Coinme has been provided a 20-day window to request a hearing before the regulatory order is finalized.
Coinme’s Chief Compliance Officer, Ben Enea, stated that the company is cooperating with regulators regarding the allegations. The DFI’s action represents a significant escalation in regulatory scrutiny within the cryptocurrency space, especially targeting crypto-to-fiat gateways where operational compliance has sometimes been ambiguous.
For institutional investors and stakeholders, the implications of Coinme’s situation extend beyond the company itself. The regulator’s actions signify a tightening stance on how customer funds, especially those held in limbo, must be treated. It signals an end to the practice of regarding unclaimed cryptocurrency assets as miscellaneous income, pushing consumer-facing crypto services to enhance their accounting practices, escheatment processes, and transparency in user communication. This could result in new compliance burdens, potentially affecting profit margins across the entire sector.
