California Orders Coinflip to Pay More Than $4.8 Million to Bitcoin ATM Scam Victims

California’s Department of Financial Protection and Innovation ordered cryptocurrency ATM operator Coinflip on November 4 to pay more than $4.8 million in compensation to scam victims and return more than $350,000 in excess fees to regulators. According to Odaily, the order covers about 500 Coinflip machines in California and requires the company to stop violating state law. The investigation found that since 2021, Coinflip had not adequately identified customers or effectively detected, prevented, reported, and mitigated suspicious activity. Transactions also exceeded California’s $1,000 daily customer limit, and the company failed to provide written disclosures before purchases and issued receipts with incomplete information. The DFPI said scammers impersonate trusted organizations and falsely claim that victims’ accounts or computers have problems. They then persuade victims to withdraw cash and transfer funds through nearby ATMs; cryptocurrency purchased after scanning a QR code is sent to the scammers’ wallets. The regulator said older adults are particularly vulnerable to these schemes.