What You Need to Know: DFPI takes action against several crypto kiosk operators who overcharged consumers – One must now pay $675,000 for flouting the law.
SACRAMENTO – In an ongoing effort to protect consumers and crack down on companies that break the law, the California Department of Financial Protection and Innovation (DFPI) today announced that it has taken action against multiple crypto kiosk operators, including Nevada-based LSGT Services, LLC (Coinhub), which must pay a total of $675,000. This includes refunds to California consumers they overcharged.
This enforcement action, the fourth of its kind by DFPI against a crypto kiosk operator in recent months, serves as a warning to companies that violate California’s Digital Financial Assets Law (DFAL), and helps protect consumers who use these kiosks (often known as crypto ATMs) to exchange cash or other forms of payment for digital financial assets.
“Crypto kiosk operators in California are on notice that we intend to root out bad actors and scammers who put consumers’ hard-earned money at risk,” said DFPI Commissioner KC Mohseni. “We welcome legitimate operators in this industry, however, DFPI will not tolerate those who flout the law and fail to implement required safeguards for customers.”
Many companies legally operate crypto kiosks in California, typically located in grocery and convenience stores, where people can insert cash directly into a kiosk machine to buy and sell digital financial assets such as Bitcoin. The transactions are often instant and non-refundable. However, a recent DFPI investigation found that since January 2024, Coinhub has committed violations that include:
- Charging California consumers fees and markups well above the statutory maximums.
- Accepting cash transactions exceeding the legal daily limit of $1,000,
- Failing to provide legally required disclosures before transactions and omitting key information on receipts, including customer names and exchange sources.
Many of the customers using the Coinhub kiosks were over 60 years old.
Today’s order for Coinhub to pay $675,000 in penalties, which includes $105,000 in restitution to California consumers, comes on the heels of several recent DFPI enforcement actions. Since June this year, DFPI has issued desist and refrain orders against the following companies that operate kiosks throughout California for DFAL violations:
- Coin Time LLC, based in Wyoming
- Anh Management, LLC (Hermes Bitcoin), based in Southern California
The companies listed above conducted thousands of transactions without collecting sufficient identifying information, in violation of federal anti-money laundering requirements and the DFAL. The orders require the companies to comply with the law and pay restitution to customers who were charged excessive fees. They also face administrative penalties.
Additionally, on June 25, 2025, DFPI fined Coinme, a crypto kiosk (ATM) operator, $300,000 for violations of DFAL, including $51,700 in restitution to California residents, and Coinme agreed to implement measures to prevent future violations.
DFPI continues to take a series of stringent enforcement actions against other unscrupulous crypto kiosk operators.
In an effort to help create a level playing field for businesses that follow the rules, DFPI was given newly expanded authority under the 2023 Digital Financial Assets Law (DFAL) and the 2020 California Consumer Financial Protection Law (CCFPL). These are among the strongest laws of their kind in the nation.
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network recently issued a notice urging operators of kiosks to be vigilant in proactively addressing potential scams and frauds. To mitigate such risks, learn more about crypto kiosk scams.
If you have been a victim of a scam or fraud, or you learn about a scam that is currently not listed on the Crypto Scam Tracker, let us know immediately by submitting a complaint with the DFPI online (dfpi.ca.gov/submit-a-complaint) or calling toll-free at (866) 275-2677.
About DFPI
The Department of Financial Protection and Innovation protects consumers, regulates financial services, and fosters responsible innovation. DFPI protects consumers by establishing and enforcing financial regulations that promote transparency and accountability. We empower all Californians to access a fair and equitable financial marketplace through education and preventing potential risks, fraud, and abuse. Learn more at dfpi.ca.gov.