The California Department of Financial Protection and Innovation (DFPI) has fined Bitcoin ATM operator Coinhub $675,000 for overcharging customers, the regulator announced Friday.
The fine includes $105,000 in restitution to California consumers who were charged more than the cap on virtual currency ATM fees and charges.
“California’s virtual currency kiosk operators know we are committed to rooting out bad actors and scammers who put consumers’ hard-earned money at risk,” DFPI Secretary KC Mohseni said in a statement. “While we welcome legitimate operators in this industry, DFPI will not tolerate operators who ignore the law and fail to provide necessary protections for their customers.”
As part of its investigation, DFPI discovered that starting in 2024, LSGT Services, LLC, doing business as Coinhub, charged markup fees in excess of the maximum amount, accepted cash transactions in excess of the $1,000 daily limit, omitted critical information on receipts, and failed to provide legally required disclaimers before transactions.
The regulator’s recent enforcement action is the fourth in recent months against crypto ATM operators as it works to issue warnings to those who violate California regulations. Digital financial assets law (DFAL).
DFPI in June Initial enforcement action taken for DFAL violationfined Bitcoin ATM operator Coinme $300,000 for violations, with $51,700 of that amount allocated to restitution to customers in California.
Other jurisdictions are cracking down on crypto ATM operators as well. The Spokane, Washington City Council unanimously passed a ban on kiosks because: Increase in fraud and financial crime.
new zealand Virtual currency ATMs will also be banned in JulyThe reason for this is that concerns about financial crime are increasing. Earlier this week, police in Massachusetts warned the public that the following had occurred: Two residents lost nearly $7,000. Total Bitcoin ATM fraud using new scheme claiming you owe money for failing jury duty.
In August, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) Urgent warning issued regarding use of Bitcoin ATMs About fraud and its impact on older Americans in particular. According to the FBI report, demographic trends areCryptocurrency fraud costs nearly $3 billion That will happen in 2024, even though they only make up about 17% of the population.
Representatives for DFPI and Coinhub did not immediately respond. decryption Request for comments.
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