Coinme allowed customers to exceed daily transaction limits and failed to provide proper disclosures. This is the agency’s first enforcement action under the state’s 2023 Digital Financial Assets Law. The settlement also includes $51,700 in restitution to a senior citizen who fell victim to fraud. Similar incidents prompted global concern. In Australia, police uncovered widespread abuse of crypto ATMs in romance scams, with one widow losing close to $282,000. Authorities found many supposed criminals were actually victims being manipulated. Meanwhile, Spokane, Washington became the first city in the state to ban crypto ATMs entirely due to rising fraud, particularly in low-income areas. Regulators across the globe are now cracking down on cryptocurrency ATMs. Coinme Agrees to Pay $300K Fine Seattle-based cryptocurrency ATM operator Coinme agreed to pay a $300,000 penalty to California regulators for violating state laws governing digital financial assets. The California Department of Financial Protection and Innovation (DFPI) stated that Coinme breached transaction limits by allowing crypto ATM users to exceed the state’s $1,000 per-day cap per customer. The company also failed to include mandatory disclosures on receipts provided at its kiosks, which are located in grocery and convenience stores throughout California. This enforcement is the DFPI’s first action under the Digital Financial Assets Law , which came into effect in 2023. The legislation was designed to address consumer protection concerns related to crypto kiosks, especially as scams involving these machines have become increasingly common. As part of the consent order, Coinme will also pay $51,700 in restitution to an elderly customer who said they were scammed. Coinme crypto ATM DFPI Commissioner KC Mohseni explained that the penalty serves as a warning to other digital asset operators that the state is very serious about enforcing compliance to protect consumers. The rise in crypto ATM-related scams has become a growing concern for regulators, as criminals often trick victims into purchasing digital assets at kiosks and sending them directly to fraudsters' wallets. The FBI reported close to 11,000 complaints related to these kinds of scams in 2024 alone, totaling over $246 million in losses. This was a 31% increase from the previous year, and seniors over 60 made up the majority of victims. Crypto ATM complaints for 2024 (Source: FBI ) Similar concerns are emerging globally. In Australia, federal police recently reached out to over 90 people as part of a crackdown on the misuse of crypto ATMs, including those affected by ”pig butchering” scams. In Texas, a sheriff physically dismantled a crypto ATM after a local family reportedly lost $25,000 in a scam. Crypto ATM Scam Targets Elderly in Australia After the Australian federal police contacted people as part of its ongoing crackdown on the criminal use of cryptocurrency ATMs, one case stood out. A 77-year-old widow lost 433,000 Australian dollars, or approximately $281,947, in an elaborate online dating scam. According to Australia’s financial intelligence agency, AUSTRAC, the woman was misled for over two years by a man posing as a Belgian national, who encouraged her to invest in Bitcoin using forged investment returns. The victim was completely unaware of the deception until police arrived at her door. She eventually became proficient at operating Bitcoin ATMs, and spent months transferring her entire life savings. Media release from AUSTRAC The scammer guided her through the process step by step, starting with cash withdrawals from traditional ATMs and feeding the funds into crypto kiosks. At one point, she carried as much as 20,000 Australian dollars in cash to complete a single transaction. She described the process as taking “half a day’s work” and recounted the emotional toll of confessing the loss of her life savings to her daughter. Another woman in her 70s also fell victim to a fake investment firm and lost over 200,000 Australian dollars. Police actions under the crackdown focused on the highest-risk users of crypto ATMs. Of the 21 people that were singled out for investigation, many turned out to be victims rather than perpetrators. This shed some light on the growing trend of ordinary citizens being exploited through promises of love, job offers, or high-return investments. Only one person has been charged so far with property laundering, while four others received formal cautions for allegedly using crypto to purchase drugs or acting as intermediaries for criminals. Some suspected mules were also revealed to be victims, who were unknowingly helping cybercriminals or attempting to recover their own stolen money. (Source: CoinATMRadar ) In response to the rising number of these incidents, AUSTRAC introduced new rules and transaction limits for crypto ATM operators on June 3 to help mitigate scams. The agency made crypto regulation a top priority for 2025. AFP Commander Graeme Marshall stressed that people should be wary of anyone promising quick profits or creating a sense of urgency, particularly if contact is made online and the person has never been met in real life. He warned the public not to make any payments via cryptocurrency if instructed by a supposed business or government agency. According to Australia’s national cybercrime reporting system, ReportCyber , there were 150 reports of scams involving crypto ATMs from January of 2024 to January of 2025, which resulted in more than 3.1 million Australian dollars in losses. Spokane Bans Crypto ATMs Spokane, Washington became the first city in the state to ban cryptocurrency ATMs . This happened after a unanimous vote by the City Council in response to the rise in scams targeting local residents. The ordinance was proposed by Council member Paul Dillon , and it aims to protect vulnerable people from fraud involving virtual currency kiosks, which he described as a favored tool of scammers. The new measure prohibits the installation of future crypto ATMs and mandates the removal of existing machines, many of which are located in low-income neighborhoods and high-traffic locations like grocery and convenience stores. Ordinance to ban crypto ATMs (Source: Spokane City Council ) The ordinance referred to a concerning increase in scam activity linked to these kiosks, and pointed out that victims often lose thousands of dollars. Within 60 days, crypto ATM operators are required to remove their machines or face civil penalties and potential revocation of business licenses. The City Council also plans to monitor and report on the effectiveness of the ban by tracking changes in reported crimes involving crypto kiosks. Local law enforcement supported the move, with police detective Tim Schwering sharing cases where funds deposited into these ATMs ended up in foreign jurisdictions like China, North Korea, and Russia. Schwering explained that scammers often impersonate law enforcement or tax officials to coerce victims into converting their money into crypto to avoid fictitious legal consequences. Once the money is transferred into cryptocurrency, it becomes nearly impossible to recover.
