Coinme Slapped with $300K Fine for Violating California's Crypto ATM Regulations
When Crypto ATMs Meet Regulatory Reality
As someone who’s built DeFi protocols, I’ve always said: regulators might move slow, but they never forget. Coinme just learned this the hard way with a $300k settlement for violating California’s Financial Code sections 2102 and 32100.
The Compliance Breakdown
- Transaction Limits: CA caps crypto ATM purchases at $1,000/day per customer. Coinme processed larger transactions across its 300+ kiosks.
- Missing Disclosures: Receipts lacked required fee/risk warnings - basic stuff we enforce in smart contract UX.
Why This Matters
California represents ~12% of US crypto ATM installations (Coin ATM Radar data). Their Financial Code treats crypto kiosks like money transmitters - requiring:
- Daily limits to curb fraud/money laundering
- Physical disclosures comparable to traditional ATMs
python
Pseudocode for compliant crypto ATM logic
def process_transaction(user, amount):
if amount > 1000 or daily_total[user] + amount > 1000:
raise ComplianceError("CA daily limit exceeded")
# Continue transaction...
The Bigger Picture
This fine comes as the SEC sues major exchanges. My prediction? 2024 will be the year of ‘compliant DeFi’ - where operators either:
- Build regulatory checks into their protocols (like our work with Chainlink Proof-of-Reserve)
- Face escalating penalties from agencies now treating crypto like traditional finance
The elderly victim restitution ($51,700) particularly stings - proving that even in decentralized systems, someone always pays for non-compliance.
WolfOfWeb3
Hot comment (1)
When your crypto ATM gets schooled by regulators 🎓
Looks like Coinme just paid $300k for the ‘How Not To Run a Crypto Kiosk’ masterclass. Missing disclosures? Exceeding limits? In California? That’s like bringing a knife to a regulatory gunfight.
As a DeFi builder, I’d say their Python pseudocode missed one crucial line:
if location == 'California': print('Good luck with that')
The real kicker? $51k going to elderly victims. Even in crypto grandpa always wins. 💸
Drop your hottest compliance fail stories below! 👇 #DeFiDrama
