Missouri seeks $1.8 million penalty from CoinFlip over crypto ATM fraud

The state of Missouri is taking legal action against GPD Holdings, the parent company of crypto ATM operator CoinFlip, accusing it of turning a blind eye to fraud and financially profiting from these schemes. According to Missouri Attorney General Catherine Hanaway’s office, CoinFlip’s crypto ATMs have allegedly enabled scams that primarily targeted seniors and military veterans.

Investigation targets and ATM operations

In December, Missouri officials launched a probe into several crypto ATM companies, including Bitcoin Depot. Bitcoin Depot, once one of the largest players in the sector, recently filed for bankruptcy. Authorities found that CoinFlip operated 136 ATMs within Missouri and a total of 4,229 machines across the United States, according to information released by the Attorney General’s office.

The lawsuit against CoinFlip centers on claims that its business practices violated Missouri’s Merchandising Practices Act. Prosecutors are asking the court to officially recognize these violations and to stop CoinFlip from operating in Missouri. They also seek up to $1,826,000 in civil penalties—$1,000 for each violation across five years—and restitution for affected consumers.

In a public statement regarding the lawsuit, the Attorney General’s office asserted, “We are asking the court to certify that CoinFlip’s practices violate the Missouri Merchandising Practices Act; to halt its operations within Missouri; to impose a $1,000 penalty per violation; and to award compensation to the victims.”

Recently, crypto ATM operators like CoinFlip and Bitcoin Depot have come under increasing scrutiny from U.S. regulators. Several states and local governments are moving to enact stricter regulations or even outright bans on these types of ATMs, citing concerns over consumer protection and financial crime.

Bitcoin Depot’s collapse signals tighter regulations

Bitcoin Depot, a major player in the crypto ATM industry, admitted in a May 12 filing to the U.S. Securities and Exchange Commission that it faced serious doubts about its ability to continue operations. The company pointed to significant legal liabilities due in late 2025 and the financial risks posed by ongoing lawsuits as critical threats to its future.

At its height, Bitcoin Depot operated more than 9,000 crypto ATMs worldwide, making it one of the largest global providers. Its recent move for voluntary bankruptcy protection in the United States underlines the growing pressures within the industry.

For context, a crypto ATM enables users to buy and sell digital assets using cash through physical kiosks. Unlike traditional bank ATMs, these machines typically do not require a bank account, with transactions going directly to digital wallets.

Ongoing debate over ATMs in the U.S.

As reports of scams linked to crypto ATMs surge, some U.S. states and cities are considering banning or heavily restricting such services. Minnesota is the latest state to weigh a comprehensive ban following a spike in fraud complaints associated with these kiosks.

The question of stricter regulation for crypto ATM operators is becoming increasingly important for the sector’s future. Regulatory agencies are stepping up oversight in the hope of both protecting consumers and curbing fraudulent activity in the growing U.S. crypto ATM market.

CoinFlip, according to reporting by Cointelegraph, has declined to comment on the pending Missouri lawsuit.