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Missouri Attorney General Catherine Hanaway has sued crypto ATM operator CoinFlip, accusing the company of facilitating scam-related transactions and profiting through excessive and poorly disclosed fees.
The lawsuit was filed in Jasper County against GPD Holdings LLC, which does business as CoinFlip. The state says CoinFlip violated the Missouri Merchandising Practices Act and failed to protect consumers using its Bitcoin ATMs.
More Than 140 Missouri CoinFlip Kiosks Are at Issue
According to the attorney general’s office, CoinFlip operates more than 140 kiosks across Missouri in convenience stores, liquor stores, vape shops and gas stations. The state says those machines have become part of a growing fraud channel because crypto ATM payments are hard to reverse once victims send funds to scammer-controlled wallets.
The lawsuit also says CoinFlip charged transaction fees of up to 21.90%, while failing to clearly disclose the full cost to users.
State Says CoinFlip Ignored Fraud Warning Signs
Hanaway’s office says CoinFlip promoted its Bitcoin ATMs as safe and equipped with fraud-prevention tools even as scam transactions continued at its Missouri kiosks. The state’s petition argues that CoinFlip’s own records showed repeated warning signs.
Those allegedly included transactions routed to wallets already used by other customers and wallets the company had flagged as criminal or terrorist-related.
FTC Data Shows Crypto ATM Scam Losses Rising
Missouri says crypto ATM fraud is a growing problem, especially for older victims. The petition cites FTC data showing fraud losses at Bitcoin ATMs rose nearly tenfold from 2020 to 2023.
It also cites a Missouri Highway Patrol fusion-center tally that found 350 crypto cases over the last two years involved a crypto ATM. The state separately pointed to FTC data showing that fraud losses by seniors have increased more than 20-fold since 2020 in scams using crypto as the payment method.
Missouri Seeks Penalties and Consumer Restitution
The lawsuit asks the court to block CoinFlip from operating in Missouri unless stronger protections are put in place. It also seeks restitution for consumers and civil penalties. Local reporting said the penalties could total about $1.826 million based on alleged violations over the past five years.
CoinFlip told KY3 that the lawsuit is “meritless” and called it a misguided attack on a company that has supported consumer-protection rules for crypto kiosks. The case now turns on whether Missouri can hold a kiosk operator responsible for failing to detect or stop scam-related transactions before victims lost their money.
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Fhumulani Lukoto
Cryptocurrency Journalist
Fhumulani Lukoto holds a Bachelors Degree in Journalism enabling her to become the writer she is today. Her passion for cryptocurrency and bitcoin started in 2021 when she began producing content in the space. A naturally inquisitive person, she dove head first into all things crypto to gain the huge wealth of knowledge she has today. Based out of Gauteng, South Africa, Fhumulani is a core member of the content team at Coin Insider.