California Orders $4.8M Payout to Bitcoin ATM Scam Victims

California’s Department of Financial Protection and Innovation ordered bitcoin ATM operator Coinflip to pay $4.8 million to scam victims after finding failures in its customer verification and suspicious-activity controls across a statewide network of roughly 500 kiosks. The regulator also required the company to halt unlawful practices tied to those deficiencies. The order makes California one of the first states to force a crypto kiosk operator to compensate fraud victims directly, underscoring growing scrutiny of the high-fee ATM channel used heavily by less tech-savvy customers. Coinflip must now remediate its compliance controls and payout process. Watch whether other state regulators adopt similar restitution requirements and whether Coinflip’s kiosk count or fees change as compliance costs rise.