Washington regulators target Coinme repayment in $8 million Bitcoin ATM enforcement case

Washington authorities have moved against a major Bitcoin ATM provider, ordering a full coinme repayment plan as part of a broader enforcement action.

Washington DFI orders Coinme to halt services and repay $8 million

The Washington state Department of Financial Institutions (DFI) has ordered Coinme to stop all money transmission activities and return more than $8 million to customers. The regulator issued a Temporary Cease and Desist Order on December 1, 2025, alleging the Seattle-based Bitcoin ATM firm wrongfully treated certain customer funds as company revenue.

According to the order, Coinme required users to purchase paper vouchers at its kiosks and then redeem them online. However, when some vouchers remained unredeemed beyond a set timeframe, the company allegedly converted the unused balances into corporate income. Regulators say this practice violated Washington’s Uniform Money Services Act and undermined protections for users who rely on licensed money transmitters.

“Washington’s money transmission laws exist to protect consumers that rely on licensed companies to safely transmit funds,” DFI Director Charlie Clark said in a statement. Moreover, the DFI emphasized that licensed entities must safeguard customer funds until they are redeemed or lawfully escheated.

Regulators question Coinme’s financial condition and disclosures

The DFI order also alleges that from 2020 through 2025, Coinme failed to maintain the tangible net worth required under state law. In addition, the company is accused of filing inaccurate reports with regulators and not clearly disclosing redemption deadlines to users purchasing vouchers at kiosks.

These alleged compliance failures compound the concerns over how unredeemed balances were handled. That said, the case also highlights broader regulatory scrutiny facing cryptocurrency service providers that operate as money transmitters and offer cash-to-crypto services through automated kiosks.

The focus on Coinme’s treatment of unredeemed vouchers may influence how other firms structure similar products. However, the DFI’s action remains preliminary until the administrative process is complete, and the company has an opportunity to contest the findings.

Potential license revocation, fines, and industry ban

As a result of the enforcement action, Coinme now faces the possible revocation of its Washington state money transmitter license. The DFI is also seeking a $300,000 civil penalty and a potential 10-year industry ban covering both the company and its CEO, Neil Bergquist.

If the order is upheld, the combination of restitution, fines, and potential long-term prohibitions would mark one of the more severe outcomes against a U.S. cryptocurrency kiosk operator. Moreover, such a decision could set a precedent for how state regulators respond when firms treat unclaimed customer balances as income without clear legal authority.

The Coinme repayment obligations outlined in the order are tied directly to allegedly unredeemed vouchers that were converted to revenue. However, the exact number of affected users and the distribution timeline for funds have not yet been detailed in public documents.

Company response and next steps in the case

Coinme has 20 days from the date of the December 1, 2025 order to request an administrative hearing before the action becomes final. During this period, the company can challenge the DFI’s factual findings, legal conclusions, and proposed penalties.

In an initial public statement, Coinme Chief Compliance Officer Ben Enea said the firm is cooperating with regulators. However, he provided few specifics on how the company plans to handle the required customer repayments or address the allegations regarding unredeemed voucher practices and reporting deficiencies.

The outcome of the Washington DFI’s case will be closely watched by other crypto ATM operators and money service businesses. Ultimately, the proceeding will determine whether Coinme can retain its license in the state and how tens of thousands of dollars in unclaimed voucher balances must be treated going forward.

In summary, Washington regulators have taken aggressive action against Coinme over unredeemed voucher balances, alleged net worth shortfalls, and disclosure failures, with the case now moving into a high-stakes administrative process.