Missouri Sues CoinFlip Over Alleged Fraud at Crypto ATMs
Missouri Sues CoinFlip Over Alleged Fraud Facilitation – Crypto ATM Operations Face Potential State Ban
Key Takeaways
- Missouri has filed a lawsuit against crypto ATM operator CoinFlip, alleging the company knowingly facilitated fraudulent transactions.
- The state is seeking civil penalties of up to $1.826 million and a court order to block CoinFlip from operating in Missouri.
- The lawsuit follows a December investigation into several crypto kiosk operators, including Bitcoin Depot.
- CoinFlip operates 136 kiosks in Missouri and 4,229 nationwide, according to its locations page.
- The company has rejected the allegations and described the lawsuit as meritless.
Missouri Files Lawsuit Alleging Fraud Facilitation by CoinFlip
Missouri Attorney General Catherine Hanaway has filed a lawsuit against CoinFlip, the operator of a crypto ATM network, accusing the company of knowingly facilitating fraudulent transactions and profiting from them through excessive fees.
According to the Attorney General’s office, the action seeks civil penalties of up to $1.826 million. The state is also asking the court to block CoinFlip from continuing its operations in Missouri. In a public statement, Hanaway said the state’s objective is to protect residents from fraud and prevent businesses from taking advantage of vulnerable individuals.
The lawsuit forms part of a broader effort by the Attorney General’s office to address fraud involving crypto kiosks. Hanaway stated that her office will pursue any business that it believes is enabling scams affecting Missouri residents.
Investigation Began in December and Included Other Operators
The legal action follows an investigation launched in December into several crypto kiosk operators after reports of scams targeting residents in the state. The probe also examined Bitcoin Depot, another operator of Bitcoin ATMs.
Bitcoin Depot filed for Chapter 11 bankruptcy earlier this month. The lawsuit against CoinFlip is separate but stems from the same investigation into alleged fraudulent activity linked to crypto ATM usage.
State authorities have described Bitcoin and crypto ATMs as tools increasingly used in fraud schemes. In her public remarks, Attorney General Hanaway compared the machines to “getaway cars” for scammers, arguing that once funds are transferred through such kiosks, they are difficult to recover.
CoinFlip’s Presence in Missouri and Nationwide
CoinFlip currently operates 136 kiosks across Missouri. Nationwide, the company lists 4,229 kiosk locations on its website. These machines allow users to conduct cryptocurrency transactions in physical retail locations.
The lawsuit seeks to prevent CoinFlip from continuing to operate within Missouri, which would directly affect those 136 in-state locations if the court grants the requested order.
The case comes amid a series of actions by state and municipal authorities targeting crypto kiosk operators. Several jurisdictions have moved to restrict or ban such machines, citing concerns about their use in fraud schemes.
CoinFlip Rejects Allegations and Defends Compliance Record
In a statement shared with BeInCrypto, a spokesperson for CoinFlip rejected the allegations and described the lawsuit as misguided. The company stated that it has actively supported the passage of cryptocurrency kiosk consumer protection laws in Missouri and other states.
According to the spokesperson, CoinFlip played a key role in Missouri’s 2025 cryptocurrency kiosk consumer protection legislation. The company said it worked with state lawmakers to secure mandatory licensure requirements, stronger compliance standards, and consumer protection measures aimed at shielding residents from scams.
CoinFlip stated that it intends to fight the lawsuit aggressively and that it expects to demonstrate that the allegations are baseless. The company maintains that it has advocated for stricter oversight and clearer rules for the industry rather than resisting regulation.
Regulatory Pressure on Crypto ATM Operators
The Missouri lawsuit is the latest example of state level scrutiny of crypto ATM networks. Authorities have increasingly focused on how these machines are used in fraud cases, particularly those involving social engineering schemes in which victims are instructed to deposit funds into crypto kiosks.
In Missouri’s case, the Attorney General’s office is pursuing both financial penalties and an operational ban. If granted, the requested court order would prevent CoinFlip from continuing to offer its services within the state.
The legal action also highlights the tension between operators that argue they comply with existing laws and regulators who contend that the current safeguards are insufficient to prevent abuse. CoinFlip’s reference to its involvement in the 2025 consumer protection legislation suggests that regulatory frameworks are already in place in Missouri, but the state now alleges that the company’s conduct violated its obligations.
Our Assessment
Missouri’s lawsuit against CoinFlip centers on allegations that the company knowingly facilitated fraudulent transactions and profited through excessive fees. The state is seeking up to $1.826 million in civil penalties and a court order to halt operations in Missouri. The action follows a December investigation into multiple crypto kiosk operators, including Bitcoin Depot, which has filed for Chapter 11 bankruptcy. CoinFlip, which operates 136 kiosks in Missouri and 4,229 nationwide, denies the allegations and states that it has supported consumer protection legislation in the state. The case represents a significant legal challenge for one of the larger crypto ATM operators active in Missouri.
