California Department of Financial Protection and Innovation Fines Coinhub
The California Department of Financial Protection and Innovation (DFPI) has imposed a hefty fine of $675,000 on Coinhub, a Bitcoin ATM operator, for a series of violations that resulted in customers being overcharged. This penalty includes $105,000 designated for restitution to consumers who were charged fees exceeding the regulated maximum for transactions using crypto ATMs.
DFPI’s Commitment to Consumer Protection
In a statement, DFPI Commissioner KC Mohseni emphasized the agency’s commitment to policing the digital currency sector in California, stating:
“Crypto kiosk operators in California are on notice that we intend to root out bad actors and scammers who put consumers’ hard-earned money at risk. We welcome legitimate operators in this industry, however, DFPI will not tolerate those who flout the law and fail to implement required safeguards for customers.”
Investigation Findings
An investigation revealed that since 2024, Coinhub, operating through LSGT Services, LLC, has engaged in practices such as:
- Levying fees beyond the permissible limit
- Allowing cash transactions exceeding the allowed $1,000 daily cap
- Providing incomplete information on transaction receipts without the mandatory legal disclaimers
