Bitcoin ATM operator CoinFlip was sued by Missouri’s attorney general over claims it enabled scam transactions and profited from excessive fees.
Missouri Attorney General Catherine Hanaway has sued CoinFlip, a Bitcoin ATM operator that says it runs the world’s largest crypto kiosk network by transaction volume, accusing the company of helping scam transactions go through it.
According to Hanaway’s office, CoinFlip operates more than 140 Bitcoin and crypto kiosks across Missouri. Hanaway said:
“Bitcoin and crypto ATMs are the new getaway cars for fraud, whisking away innocent people’s money to scammers, never to return. As Attorney General, I’ll use every tool to flush out the cowardly scammers hiding behind screens and hold them accountable.”
CoinFlip markets its Bitcoin ATMs as safe and equipped with fraud-prevention tools. But the state argues scam transactions at those kiosks still happen regularly, and that the fees are often excessive and poorly disclosed.
- The attorney general is seeking a court ruling that CoinFlip has violated the Missouri Merchandising Practices Act.
- Hanaway also seeks an injunction against CoinFlip’s operation within Missouri, as well as civil penalties of $1,000 for each violation during the last five years, up to $1.8 million.
The case follows a broader Missouri investigation launched in December into five Bitcoin ATM operators. Those companies were CoinFlip, Rockitcoin, Athena Bitcoin, Byte Federal, and Bitcoin Depot, which recently filed for bankruptcy.
Read also: Canada to Ban Bitcoin ATMs Nationwide: What’s Behind the Crackdown
Bitcoin ATM Scam Pressure Grows
The Missouri authorities referred to statistics from the Missouri State Highway Patrol’s Missouri Information Analysis Center and St. Louis Fusion Center, where out of 350 crypto investigations for the last two years, there was involvement of a Bitcoin ATM.
But the pressure on Bitcoin ATMs is growing outside Missouri too. The Federal Trade Commission (FTC) has said reported cases of fraud losses associated with Bitcoin ATMs increased nine times between 2020 and 2023, exceeded $65 million in the first half of 2024, and recorded an average reported loss of $10,000.
The FTC said people aged 60 and older were more than three times as likely as younger adults to report losses through Bitcoin ATMs in the first half of 2024, and they made up about 71% of reported losses from these machines.
Read more: What Is Crypto ATM: How Bitcoin ATMs Work and Where to Find Them
