Washington Slams Coinme Over Misreported Millions in Unredeemed Crypto Funds
Washington’s financial watchdog has delivered a seismic blow to Bitcoin ATM operator Coinme, accusing the company of breaching state money-transmission rules and misreporting millions in unredeemed customer funds as profit. The state's Department of Financial Institutions (DFI) has issued a temporary cease-and-desist order that could escalate into a permanent shutdown, coupled with the threat of license revocation, hefty fines, and a decade-long industry ban for both the company and its CEO.
Regulators Crack Down on Coinme’s Voucher Business Model
In an enforcement action announced last week, the Washington DFI alleged that Coinme improperly categorised more than $8.37 million in unredeemed vouchers as income between 2023 and 2024. The vouchers were part of a system that allowed customers to purchase cryptocurrency using cash at physical kiosks and later redeem it online.
However, many users failed to cash in their vouchers within the redemption window. Rather than safeguarding those unclaimed funds, regulators say Coinme treated them as company revenue — a move considered a violation of the state’s Uniform Money Services Act. The order contends this practice amounted to mishandling customer assets and concealing obligations from both users and authorities.
According to DFI filings, Coinme reported $2.2 million in unredeemed funds from Washington customers at the end of 2023, followed by an additional $6.17 million from Washington and out-of-state clients by year-end 2024. These figures highlight the scale of the accounting discrepancies at play.
Immediate Cease in Operations and Restitution Demands
Under the DFI’s order, Coinme must immediately halt its services in Washington, except for returning funds owed to customers. The company is required to:
- Segregate all Washington-based customer assets into dedicated accounts.
- Refund users the greater of either their total deposits or the crypto’s value at the time of the order.
- Pay a $300,000 fine and a $375 investigation fee.
Coinme has 20 days to request an adjudicative hearing from the date of notice. Failing that, the cease-and-desist order automatically converts into a permanent enforcement action on day 21. The order also outlines the regulator’s intention to revoke Coinme’s money-transmission licence altogether, preventing the company from operating as a lawful crypto service provider in the state.
CEO Faces 10-Year Ban Amid Broader Industry Scrutiny
The DFI’s order extends beyond Coinme as an entity. Its CEO and co-founder, Neil Bergquist, has also been named in the enforcement action. Prosecutors are seeking to prohibit both him and the company from engaging in any money-transmission business for the next ten years.
From 2020 to 2025, Coinme also allegedly failed to meet ongoing financial compliance requirements, including maintaining the minimum tangible net worth mandated by state law, submitting late filings, and circulating inaccurate reports—signs of persistent regulatory negligence rather than isolated oversight.
While Coinme has yet to publicly comment, the order represents a significant reputational and operational blow for a firm once considered a pioneer in the crypto-ATM sector. Its potential collapse could echo other regional enforcement trends, where authorities across the U.S. are tightening oversight on digital financial intermediaries.
Industry Voices Reflect on the Fallout
Commenting on the development, Daniel Liu, CEO of Republic Technologies, suggested the root cause was likely “operational mismanagement rather than malicious activity.” However, he noted that if Coinme’s approach to unredeemed vouchers mimicked retail treatment of gift card liabilities, “then the accounting practice itself may not have been unreasonable — but the failure to disclose and execute properly is where it faltered.”
Liu added that the voucher phase-out process and customer support fallout “exposed the company’s internal weaknesses,” noting that a lack of robust client engagement channels could have exacerbated customer refund complications.
This assessment reflects a critical perspective within the crypto recruitment and fintech compliance space — that operational oversight, not fraud, often sparks some of the most damaging regulatory penalties. As a blockchain recruitment agency, Spectrum Search has consistently seen how poor governance and lapses in financial auditing can trigger cascading consequences for both reputation and talent acquisition.
A Trend of Heavier Enforcement in Crypto Kiosks
Coinme’s case arrives in the wake of growing regulatory pressure on U.S.-based Bitcoin ATM services. Just last month, California’s Department of Financial Protection and Innovation issued a $675,000 penalty against Coinhub, another kiosk operator, for overcharging customers—$105,000 of which was allocated as direct consumer restitution.
California also fined Coinme itself earlier this year for similar misconduct — charging markups above state limits, handling cash transactions exceeding $1,000 per day, and omitting key data from receipts. That action in June carried a separate $300,000 fine and $51,700 in restitution.
The recurrence of such cases signals a rapidly maturing compliance environment for crypto-service firms. State regulators are tightening controls not only around digital exchanges but also kiosk-based and retail-level operators. The regulatory push aligns with broader efforts to eliminate opacity and introduce consumer protection standards that mirror those of traditional financial institutions.
Ripples for Crypto Recruitment and Compliance Hiring
From a web3 recruitment perspective, incidents like Coinme’s enforcement struggle underscore a rising appetite for compliance talent in the digital asset space. Financial watchdogs are increasingly treating crypto intermediaries as formal fiduciaries, meaning the demand for compliance, accounting, and regulatory specialists is expanding sharply.
At Spectrum Search, our experience as a dedicated crypto recruitment agency shows a consistent rise in requests from employers seeking professionals who can bridge operational innovation with airtight compliance frameworks. Crypto and blockchain firms under investigation often respond by hiring regulatory veterans or embedding legal counsel directly into their leadership ranks.
In a recent enforcement trend parallel to Coinme’s, the $44 million CoinDCX exploit and the WazirX attack both amplified calls for deeper oversight, while simultaneously driving demand for specialised blockchain talent capable of pre-empting compliance failures.
Coinme’s alleged conduct also serves as a warning to venture-backed startups that rapid growth must not outpace governance. For blockchain and DeFi recruitment specialists, this scenario reinforces that firms and candidates alike must adopt a compliance-first mindset. Industry headhunters are now paying closer attention to leadership track records in risk management, something that could directly impact executive-level hiring standards in 2025.
Regulatory Oversight Meets Accountability Culture
Washington’s DFI has taken a notably aggressive stance in enforcing transparency and consumer restitution—values that the emerging web3 ecosystem must increasingly embody. These actions also reveal a shifting cultural tide: regulatory compliance and ethical transparency are no longer secondary concerns but central to sustainable crypto growth and employment stability.
By all accounts, Coinme’s future in the state—and potentially its viability as a national crypto service—will depend on how it navigates the next 20 days. Should the company fail to mount a successful appeal, Washington could set a precedent for stricter enforcement across U.S. state lines, further transforming not just compliance models but also the hiring dynamics across fintech and blockchain innovation hubs.
Amid such heightened scrutiny, the UK’s own crypto sector—where Spectrum Search operates as a leading web3 recruitment agency—is likely to draw fundamental lessons. The message is clear: regulatory literacy is becoming as valuable a commodity as blockchain engineering skills themselves.