Coinme's Voucher Program Under Scrutiny
Washington state regulators have ordered Bitcoin 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 Bitcoin 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.
Coinme’s case highlights rising scrutiny on crypto kiosk operators. States are tightening rules around custody of customer funds, reporting standards, and abandoned-property requirements.
Operational Shortcomings Cited by Regulators
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 user or the value of the crypto owed on the date of the order.
Potential Penalties for Coinme and its CEO
DFI’s Statement of Charges sets out several penalties. The regulator intends to revoke Coinme’s Washington money-transmitter license and seeks 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.
Industry Reactions and Interpretations
Reactions have focused on the management of customer funds 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 clearly fell short.” Liu also noted: “The phase-out of the product introduced preventable issues, including what seems to have been a dysfunctional customer-support pipeline. Those are responsibilities the company has to own.”
Crypto ATM operators in multiple states are facing closer oversight. Compliance lapses — even bookkeeping disputes — can now trigger license reviews, fines, and multi-year bans.
Broader Regulatory Trend Affecting Crypto Kiosks
The Washington case lands as other U.S. states increase enforcement actions against Bitcoin ATM firms. 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 same 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.