The California Department of Financial Protection and Innovation (DFPI) announced today that it has entered into a consent order with Seattle-based Coinme, Inc.

This marks the first enforcement action under the state’s Digital Financial Assets Law (DFAL).

California Cracks Down on Coinme

Coinme, which operates crypto kiosks in grocery and convenience stores across California, was found to have violated DFAL’s daily transaction limit by allowing customers to exchange or withdraw more than $1,000 per day. The DFPI investigation also revealed that Coinme failed to provide required disclosures on customer receipts.

Under the terms of the consent order, Coinme has agreed to pay a $300,000 penalty, including $51,700 in restitution to an elderly California resident impacted by the violations.

According to the official press release by DFPI, the company will also implement compliance measures to prevent future infractions.

In a statement, DFPI Commissioner KC Mohseni said

“This enforcement action should send a strong message to kiosk operators that California means business when it requires digital asset companies to follow the rules that help prevent scammers from taking advantage of unsuspecting Californians.”

Crypto Kiosk Scams Surge

Fraud losses linked to crypto kiosks surged nearly tenfold between 2020 and 2023, as per the FTC’s report last September. The FBI recorded $247 million in kiosk-related losses in 2024. It noted a 99% rise in complaints from the previous year. Both agencies warn that these scams have disproportionately harmed older Americans, with the FTC revealing that those aged 60 and above were over three times more likely than younger adults to report a loss through a crypto kiosk.

In response, California enacted the DFAL in 2023 to regulate kiosk operators and reduce these risks.

Other states taking action include Illinois. In early June, the lawmakers of the state sent a bill to Gov. JB Pritzker, who had advocated for such measures earlier this year. Vermont also enacted regulations in May that set daily transaction limits on crypto kiosks to curb victim losses, while Nebraska implemented a law in March requiring crypto ATM operators to obtain licenses.

A Massachusetts federal court has ordered My Big Coin Pay, Inc. and My Big Coin, Inc., along with individuals Mark Gillespie of Michigan and John Roche of California, to collectively pay nearly $25.8 million in penalties and restitution to the Commodity Futures Trading Commission (CFTC).

The ruling was issued on Wednesday by the US District Court for the District of Massachusetts and stems from a long-running digital asset fraud scheme involving the fraudulent sale of a virtual currency known as My Big Coin (MBC).

The court’s decision includes a $19.3 million civil monetary penalty and an additional $6.4 million in restitution for customers who were deceived by misleading claims about the coin’s value and backing.

According to the CFTC’s official press release, from January 2014 to June 2017, the defendants falsely promoted MBC as a fully functional digital currency backed by gold and actively traded on established platforms. In reality, the currency lacked any such support or market presence.

Over $6 million was collected from at least 28 customers under pretenses, while the funds were largely misappropriated by co-defendant Randall Crater, who was previously convicted and sentenced to more than eight years in prison for his central role in the scheme.

The court’s latest order resolves the commodities regulator’s civil enforcement claims against Gillespie, Roche, and the two Nevada-based My Big Coin companies. It also imposes a permanent trading ban on the defendants, barring them from participating in any CFTC-regulated markets or registering with the agency.

Crater, the primary orchestrator of the fraud, was earlier sentenced in a separate criminal case and ordered to forfeit and repay more than $7.6 million

In a statement, the agency said.

“The CFTC cautions that orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.”

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