Washington state regulators have issued a cease-and-desist order against Bitcoin ATM operator Coinme, directing the company to stop operations and return more than $8 million in unclaimed customer funds. The Washington State Department of Financial Institutions (DFI) found that the company violated the Uniform Money Services Act by improperly classifying unredeemed crypto vouchers as company income.
Between January 2023 and December 2024, Coinme allegedly reported $8.37 million in unclaimed vouchers as revenue—$2.2 million of which came from Washington customers by the end of 2023. Coinme’s business model allowed users to buy cryptocurrency through paper vouchers, but many customers never redeemed them. Instead of treating the funds as liabilities, regulators say the company treated them as earnings without adequate disclosure.
The DFI has given Coinme 20 days to request a hearing. If the company does not respond, the order becomes permanent. Regulators also plan to revoke Coinme’s money transmitter license and enforce $675,000 in fines. Additionally, co-founder Neil Bergquist may face a 10-year ban from engaging in money transmission activities.
Industry experts believe the issue stems from operational mismanagement, not intentional wrongdoing. They highlight longstanding gaps in customer support and internal processes that contributed to the misclassification of funds.
Coinme Faces Regulatory Action Over Unclaimed Vouchers
Washington regulators argue that unredeemed vouchers should have been treated as customer liabilities, not company profit. The improper accounting practice allegedly inflated Coinme’s financial records and concealed the risks tied to unclaimed funds. The cease-and-desist order aims to protect consumers while ensuring compliance with state money service laws.
License Revocation and Penalties Ahead
Beyond halting operations, the DFI intends to take further action, including revoking Coinme’s license and imposing substantial fines. With the possibility of leadership bans and mandated refunds, Coinme’s future in Washington remains uncertain as it faces increasing regulatory pressure and reputational challenges.
