Coinme Faces License Revocation and 10-Year Ban in Washington Crackdown

What Did Washington Regulators Find in Coinme’s Voucher Program?

Washington state regulators have ordered BTC ATM operator Coinme to stop serving local customers and prepare to return more than $8 million in unredeemed customer vouchers. The temporary cease-and-desist order, issued by the Washington State Department of Financial Institutions (DFI), claims the company counted unredeemed vouchers as income for two consecutive years and violated the state’s Uniform Money Services Act.

Between January 2023 and December 2024, Coinme allegedly recognized $8.37 million in unredeemed vouchers as revenue — including $2.2 million from Washington customers in 2023 and $6.17 million from Washington and non-Washington customers in 2024. According to the filing, these vouchers represented customer funds that had not been redeemed for BTC or other digital assets.

DFI said Coinme failed to disclose this practice and did not treat the unclaimed amounts as abandoned property, which state law requires. The firm has 20 days from the date the order is served to request an adjudicative hearing. If it does not, the action becomes permanent on day 21.

Investor Takeaway

How Did Coinme’s Operations Fall Short of State Requirements?

Coinme distributed crypto through paper vouchers that customers purchased at kiosks, then redeemed online. Many did not redeem their vouchers before expiration. Instead of holding those funds as customer liabilities, the company reportedly treated the balances as company income.

DFI filings also cite a series of operational issues between 2020 and 2025, including periods when Coinme failed to meet the state’s net-worth threshold, inconsistent records of permissible investments, inaccurate annual reports, and late regulatory filings. Under the order, Coinme must stop serving Washington customers except to return their funds and must separate all customer assets into individual accounts.

Restitution must be based on whichever amount is greater: the original value paid by the owed on the date of the order.

What Penalties Could Coinme and Its CEO Face?

DFI’s Statement of Charges sets out several penalties. The regulator intends to revoke Coinme’s Washington money-transmitter license and viewks a $300,000 fine along with a $375 investigation fee. The action also targets co-founder and CEO Neil Bergquist. Both the firm and Bergquist could be prohibited from taking part in any money-transmission business in the state for ten years.

Decrypt reached out to the company for comment but had not received a response at the time of publication.

How Are Industry Peers Interpreting the Case?

Reactions have focused on the rather than concerns over missing assets. Daniel Liu, CEO of Republic Technologies, told Decrypt the situation appears to stem from “operational mismanagement rather than loss or theft of customer funds,” adding that the structure may resemble unused gift-card accounting. He said, “then the underlying practice itself is not inherently unreasonable, but the execution clahead fell short.”

Liu also noted: “The phase-out of the product introduced preventable issues, including what viewms to have been a dysfunctional customer-support pipeline. Those are responsibilities the company has to own.”

Investor Takeaway

Is Washington Part of a Broader Crackdown on Crypto Kiosks?

The Washington case lands as other U.S. states increase . In October, California’s Department of Financial Protection and Innovation fined Coinhub $675,000 for charging fees above state limits. The penalty included $105,000 in restitution to affected users.

California had also fined Coinme $300,000 in June for excessive markups, accepting cash transactions above the permitted $1,000 daily limit, and failing to include required details on receipts. That earlier case required $51,700 in consumer restitution.

Taken together, the actions signal a broader regulatory shift surrounding crypto kiosks. States are reviewing how operators handle cash, report liabilities, and manage abandoned property. Coinme’s Washington order suggests regulators may now treat voucher-based models with the identical scrutiny applied to gift-card issuers and remittance services.

With $8 million in customer funds at issue and a potential decade-long industry ban on the table, Coinme’s response during the 20-day window will determine whether it can continue operating in Washington or face a permanent shutdown in the state.