Key Highlights
- Missouri Attorney General Catherine Hanaway sued CoinFlip over alleged crypto ATM-related scams targeting vulnerable users, including seniors.
- The state claims CoinFlip earned fees from these transactions and did not do enough to stop repeated fraud cases across its 140+ kiosks.
- Hanaway says crypto ATM scams are rising fast in the U.S., with billions in losses reported.
Missouri Attorney General Catherine Hanaway has filed a lawsuit against Bitcoin ATM operator CoinFlip (GPD Holdings LLC), accusing the company of enabling fraudulent transactions through its crypto kiosks and earning profits from them.
According to the case file, the lawsuit focuses on CoinFlip’s operations in Missouri, where the company runs more than 140 Bitcoin ATMs in places like gas stations, convenience stores, vape shops, and liquor stores.
Hanaway said the machines have become a channel for scams that mainly affect elderly residents and other vulnerable users.
How victims are allegedly scammed using the ATMs
Hanaway alleged that scammers use these kiosks by convincing victims to insert cash into the machines under false claims. The scammers often pretend to be police officers, government workers, tech support staff, or even family members in trouble.
Victims are told they must “act fast” and send money through a Bitcoin ATM to solve an urgent problem. Once the cash is put into the machine, it is turned into cryptocurrency and sent to scammers. After that, it is almost impossible to get the money back.
The lawsuit alleges that CoinFlip made money from these transactions through fees that are not always clear to users. The state also claims the company did not do enough to stop fraud, even though scam cases kept happening on its machines. Officials say CoinFlip tells the public that its ATMs are safe, but scam transactions still happen again and again.
“Bitcoin and crypto ATMs are the new getaway cars for fraud, whisking away innocent people’s money to scammers, never to return,” said Attorney General Hanaway in a statement.
She added that “I’ll use every tool to flush out the cowardly scammers hiding behind screens and hold them accountable,” stressing that the office is prioritizing protection for seniors and veterans.
Missouri is asking the court to stop CoinFlip from operating in the state. The lawsuit also wants the company to pay civil penalties of up to $1.83 million. On top of that, the state is asking for $1,000 for each violation over the past five years, which could reach about $1.826 million, plus money to repay victims.
Officials claim that state analysts identified roughly 350 crypto ATM-related cases over the past two years, showing repeated misuse of these machines.
CoinFlip response to the allegation
Meanwhile, CoinFlip has rejected the allegations, calling the case “meritless” and a “misguided attack” on the company.
In a statement shared with The Crypto Time, a spokesperson from the company said that it said it has spent years pushing for stronger rules and consumer protection laws for cryptocurrency kiosks in Missouri and other parts of the United States.
The company added that Missouri’s 2025 crypto kiosk law exists because CoinFlip supported and pushed for it, saying it helped design stronger compliance rules and consumer protection standards. It said regulators should focus on catching real criminals instead of pursuing compliant companies.
“Rather than waste taxpayer money pursuing a licensed and regulated company, the Attorney General’s office should investigate, catch and stop those criminals preying on Missourians.” CoinFlip added that it will fight the lawsuit aggressively and expects to prove the allegations are baseless.
Global crackdown on Crypto ATM
Crypto ATM scams have been increasing lately across the United States. It majorly involves the victims being tricked into sending money because they trust the fake story they are told.
Federal Trade Commission data cited in the case shows fraud losses involving crypto ATMs increased nearly tenfold between 2020 and 2023, with more than $65 million reported in losses in just the first half of 2024. Seniors have been heavily targeted, with losses rising more than 20 times in scams involving cryptocurrency payments since 2020.
The Missouri case also comes as more states are tightening rules around crypto ATMs. Some states and countries, including Canada and New Zealand, are even banning them completely. At the same time, other Bitcoin ATM companies are facing pressure due to rising legal costs and stricter rules across the country.
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