Coinme Fined $300K for Breaking California’s Crypto ATM Rules – Here’s Why It Matters

The Fine Print: What Actually Happened

Coinme, the Seattle-based crypto ATM operator, just got slapped with a \(300,000 fine by California’s Department of Financial Protection and Innovation (DFPI). Yes, you read that right—\)300K. The trigger? They repeatedly broke one of California’s most straightforward crypto rules: no more than $1,000 in daily transactions per customer on crypto ATMs.

That number isn’t arbitrary. It’s part of a broader regulatory framework designed to prevent money laundering and protect vulnerable users—especially seniors who may not fully grasp how fast digital assets can vanish.

The Hidden Cost: Missing Disclosures

Here’s where it gets interesting—and alarming. Beyond exceeding the daily cap, Coinme failed to include required disclosures on customer receipts from their kiosks in grocery stores and convenience shops across the state.

No warning labels. No risk disclaimers. Just cash-in-and-out mechanics with zero context. That means users—especially older adults—were handed machines that looked like regular ATMs but were effectively gateways to unregulated financial exposure.

I’ve reviewed dozens of these terminal designs over the years. They’re sleek, they’re fast, they’re convenient… but when legal safeguards are stripped out, you’re not offering access—you’re enabling risk without consent.

A Bigger Problem Than Just Money

The settlement includes $51,700 in compensation paid directly to an elderly Californian who claimed she was scammed via one of these machines. That detail alone should send shivers through any startup founder thinking “we’ll fix compliance later.”

Regulators aren’t playing around anymore. Compliance is not a checkbox—it’s embedded into product design.

And let me be clear: this isn’t about punishing innovation. It’s about protecting users from themselves—and from bad actors exploiting gray zones.

Why This Should Matter to You (Even If You Don’t Use Crypto ATMs)

If you’re holding Bitcoin or Ethereum—or even just curious about decentralized finance—you should care because this case sets precedent.

Every time a company bypasses disclosure rules or pushes transaction limits past safe thresholds, they erode public trust in crypto as a whole.

When Grandma loses her life savings because she didn’t know she was signing up for volatile asset trading disguised as cash withdrawal? That story doesn’t end with Coinme getting fined—it ends with regulators clamping down harder on all crypto services.

This is why I always stress: regulatory friction isn’t evil—it’s infrastructure. Without guardrails, we don’t get adoption; we get collapse.

And yes—I’m still using my own Coinbase vaults and private keys while keeping an eye on all such developments… because even I need reminders that freedom comes with responsibility.