Coinme: $2.5M Settlement With 34 Regulators Shuts Its Supermarket Crypto Kiosks

On a Friday night in September 2024, an 83-year-old woman named Lois picked up the phone at her home in Rossmoor, a retirement community east of San Francisco, and heard a man sobbing that he was her grandson. He said he had crashed a car after too many beers and needed $9,500 for bail. The court, the caller explained, had an account with Coinstar. So she went to her bank, then to the Coinstar machine in a Safeway supermarket, and fed it $100 bills while the voice on the phone read out the instructions. The crypto service inside that machine was run by Coinme, a Seattle company. Two more calls followed, with demands for $15,000 and then $25,000. By the time another shopper persuaded her to text her real grandson, she had lost nearly $50,000, the San Francisco station KGO-TV reported. Coinme told the station the money had been "instantly sent outside of Coinme's platform making the funds unrecoverable."

On 8 October 2026 the machines got an end date. Thirty-four state financial regulators announced a settlement with Coinme over alleged failures under the Bank Secrecy Act, the federal law that makes money businesses check who their customers are and report suspicious payments, much as a broker must vet a new client. Coinme agreed to pay $2.5 million, hire an independent consultant to review its anti-money-laundering controls, and stop running crypto kiosks in all 34 jurisdictions by 1 January 2027. If it is still selling crypto through kiosks there after that date, it owes a further $4 million. Coinme neither admitted nor denied wrongdoing.

The network is large. Coinstar, the Bellevue, Washington, company best known for supermarket machines that turn loose change into cash or gift cards, says more than 6,000 of its kiosks are crypto-enabled, and Coinme has been its partner since 2018. Bitcoin, the best-known cryptocurrency, is a digital currency no bank runs; once it is sent, the payment is final, like handing over cash. A crypto kiosk is the cash counter for that system: feed in notes, name a destination, and the coins arrive within minutes.

What the regulators found

The settlement, signed as a single consent order that took effect on 7 October, was coordinated through the Conference of State Bank Supervisors (CSBS) and the Money Transmitter Regulators Association (MTRA). It says a joint examination began in June 2025 and covered Coinme's business from 31 March 2023 to 31 March 2025. Nine states did the examining: Alaska, Colorado, Florida, Georgia, Kentucky, New Hampshire, North Carolina, Ohio and South Dakota.

Their report, as summarised in the order, found that Coinme did not keep an effective programme to manage the risks of its kiosk business. The named weak points were transaction monitoring, know-your-customer checks (confirming who a buyer really is), suspicious activity reporting (flagging odd payments to federal authorities), enhanced checks on higher-risk customers, and recordkeeping. Together with "insufficient responses" to problems raised in earlier examinations, the order says, these "perpetuated a high-risk environment for its kiosk business that left it vulnerable to exploitation by criminal actors." The Washington State Department of Financial Institutions (DFI) added that Coinme had failed to meet state net worth requirements and had poor accounting practices. The order also records that Coinme made "material enhancements" to its controls during and after the period examined.

"State regulation of money services exists to protect consumers from scams and bad actors," said Charlie Clark, director of the Washington DFI.

The $2.5 million is $2.2 million in penalties and $300,000 in costs, shared out by transaction volume, according to the Illinois Department of Financial and Professional Regulation (IDFPR). Georgia takes the largest share of the penalty at $377,709.28, followed by Washington at $261,658.39 and Florida at $225,165.31. The $4 million backstop would be split evenly, $117,647.06 a state. Coinme may not restart kiosks in any of the 34 without that regulator's written permission.

©CMZ chart. Data: multistate consent order, Appendix B

The 34

The order lists 32 states plus the District of Columbia and Puerto Rico: Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Maryland, Minnesota, Mississippi, Nebraska, New Mexico, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Washington and West Virginia. Alaska, Arkansas, Georgia, Illinois, North Carolina, Ohio and Washington form the executive committee that will police it.

Some large markets are missing, among them California, Texas, New York, New Jersey, Michigan and Massachusetts. New Hampshire helped examine Coinme but is not a party. In Tennessee the deadline changes little, since the state banned crypto ATMs from 1 July 2026.

What changes at the supermarket

The Coinstar machine itself stays. On 8 October, the day of the announcement, Coinstar posted a separate notice: CINQ, the crypto wallet it launched in October 2024 with the provider Zero Hash, is being withdrawn. Crypto disappeared from the CINQ app on 14 October, it leaves Coinstar kiosks on 19 November, and the wallets close on 4 January 2027. Coinstar says its other kiosk products are not affected.

Put together, a shopper in the 34 jurisdictions should find that after 1 January a Coinstar machine still counts coins and sells gift cards, but no longer sells crypto at all. Elsewhere, Coinme's kiosks are outside this order, and Coinme has not said publicly what happens to them. The order covers kiosks only, not Coinme's app or online accounts. Coinstar's notice does not mention the settlement, and no Coinstar comment on it has been published. Coinme's only public line, reported by GNcrypto, is that it "has resolved the multistate examination through a consent order and is carrying out its terms."

Washington, California and a buyer

The settlement also closes Washington's own case. On 25 November 2025 the DFI charged Coinme and its chief executive, Neil Bergquist, alleging that the company booked customers' money as its own income. Coinme's kiosks once printed vouchers that buyers had to redeem online; when they did not, Coinme counted the money as revenue, recording $2,201,254 at the end of 2023 and $6,170,822 at the end of 2024. The charges also alleged a negative tangible net worth (debts larger than hard assets) at the end of 2022, 2023 and 2024, and receipts listing a customer support number that did not work between June and October 2024. The DFI sought to revoke Coinme's licence, fine it $300,000 and ban Bergquist from the industry for 10 years, and a temporary order stopped new business in the state. Coinme called it an accounting dispute. "We treated unredeemed voucher payments the same way major retailers treat unredeemed gift cards," said Ben Enea, its chief compliance officer. An interim deal on 23 December 2025 let Coinme resume.

California's Department of Financial Protection and Innovation (DFPI) had already acted twice. In June 2025 it fined Coinme $300,000, including $51,700 in refunds, for letting kiosks take more than the state's $1,000 daily limit from a customer. In February 2026 it ordered $174,874.28 refunded for fees above California's cap of $5 or 15% of a transaction.

There is a buyer. In January 2026 Polygon Labs, the company behind the Polygon blockchain, agreed to buy Coinme and the wallet firm Sequence for a combined price of more than $250 million. The consent order approves that change of control, and bars anyone who left Coinme's management after 1 January 2023 from returning without the states' approval. On 14 October Polygon announced the deal was done. "Completing the Coinme acquisition brings regulated U.S. money movement into Open Money Stack," said Marc Boiron, its chief executive. Polygon has presented the deal as its way into regulated US payments.

The wider squeeze

The machines have become the phone fraudster's favourite till. In 2025 the FBI's Internet Crime Complaint Center (IC3) logged 13,460 complaints involving crypto kiosks and $389 million lost, with people aged 60 and over losing $257 million of it. Bitcoin Depot, once North America's largest operator, filed for Chapter 11 bankruptcy on 18 May 2026 and switched off its network. Two days later Missouri's attorney general, Catherine Hanaway, sued CoinFlip in Jasper County Circuit Court, calling crypto ATMs "getaway cars for fraud"; CoinFlip called the suit meritless. Nearly three dozen states now restrict the machines, according to AARP, and Indiana and Tennessee ban them. Lois lives in California, one of the states this settlement does not cover.