DFPI Acts Against Crypto Kiosk Operators for Consumer Overcharging
SACRAMENTO – The California Department of Financial Protection and Innovation (DFPI) has announced significant enforcement actions against various crypto kiosk operators, including LSGT Services, LLC (Coinhub) based in Nevada. This initiative aims to safeguard consumers and ensure compliance with state regulations, resulting in a total penalty of $675,000 to be paid by Coinhub. This amount includes refunds for California consumers who were overcharged. This latest action marks the fourth instance in which DFPI has intervened against crypto kiosk operators in recent months, underscoring its commitment to enforcing the Digital Financial Assets Law (DFAL) in California.
Addressing Violations in the Crypto Kiosk Industry
DFPI Commissioner KC Mohseni emphasized the agency’s dedication to eliminating fraud and protecting consumers from unscrupulous practices. “Crypto kiosk operators in California are on notice that we intend to root out bad actors and scammers who put consumers’ hard-earned money at risk,” he stated. While many crypto kiosks operate legally in California, primarily situated in grocery and convenience stores, the recent investigation into Coinhub revealed serious infractions. These included charging excessive fees beyond the legal limits, processing cash transactions above the permissible daily cap of $1,000, and failing to provide necessary disclosures before transactions, along with missing critical information on receipts.
Impact on Vulnerable Consumers
The investigation highlighted that a significant number of Coinhub’s customers were seniors over the age of 60. The $675,000 penalty imposed on Coinhub, which includes $105,000 earmarked for restitution, follows a pattern of DFPI’s enforcement actions against various operators in the crypto kiosk sector. Since June of this year, DFPI has issued cease and desist orders to multiple kiosk operators found violating the DFAL. These operators conducted numerous transactions without collecting adequate identifying information, breaching federal anti-money laundering laws and state regulations.
Ongoing Regulatory Efforts and Consumer Protection
The DFPI’s recent actions are part of a broader strategy to maintain fair practices in the crypto industry. On June 25, 2025, DFPI also levied a $300,000 fine against Coinme, another crypto kiosk operator, for similar violations, which included $51,700 in restitution to affected California residents. Coinme has since committed to implementing measures to prevent future infractions. The DFPI’s expanded authority under the 2023 Digital Financial Assets Law and the 2020 California Consumer Financial Protection Law aims to strengthen consumer protections in the financial marketplace.
Staying Informed and Reporting Fraud
In response to the rising risks associated with crypto kiosks, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network has advised kiosk operators to remain vigilant against potential scams and fraudulent activities. Individuals who suspect they may have fallen victim to scams, or who are aware of ongoing fraudulent schemes not yet reported, are encouraged to submit complaints to the DFPI online or by phone.
About DFPI
The Department of Financial Protection and Innovation is dedicated to protecting consumers, regulating the financial services industry, and promoting responsible innovation. DFPI strives to ensure transparency and accountability in financial regulations, empowering Californians to access a fair and equitable financial marketplace while preventing fraud and other risks. For more information, individuals can visit the DFPI’s official website.
