Missouri law enforcement has taken a hard line against the crypto ATM industry. The state's Attorney General's office, after launching an investigation in December, formally sued CoinFlip, accusing the operator of running fraudulent operations through 136 crypto ATMs across the state, in violation of the Missouri Merchandising Practices Act. Prosecutors are asking the court to certify these violations, halt CoinFlip's operations in Missouri, and impose civil penalties of up to $1,000 per violation, totaling a maximum of $1.826 million over five years, plus restitution for affected consumers.
The Attorney General's office said in a public statement: "We are asking the court to certify that CoinFlip’s practices violate the Missouri Merchandising Practices Act; to halt its operations within Missouri; to impose a $1,000 penalty per violation; and to award compensation to the victims."
$1.8M Fine and Operation Ban Sought
According to official information, CoinFlip operated a total of 4,229 crypto ATMs across the United States, with 136 located in Missouri. These machines allow users to buy and sell digital assets with cash directly, bypassing traditional bank accounts. But convenience has been overshadowed by a surge in scam complaints — the very catalyst for regulatory action. Missouri authorities are seeking a permanent injunction to prevent CoinFlip from continuing its crypto ATM business in the state.
CoinFlip declined to comment on the pending lawsuit, according to Cointelegraph's reporting.
Bitcoin Depot Bankruptcy Signals Industry Pressure
Another major player in the crypto ATM space, Bitcoin Depot, has already collapsed. The firm, which once operated more than 9,000 crypto ATMs globally, admitted in a May 12 filing with the U.S. Securities and Exchange Commission that there was substantial doubt about its ability to continue as a going concern. Bitcoin Depot cited significant legal liabilities coming due in late 2025 and ongoing litigation risks as critical threats. It subsequently filed for voluntary bankruptcy protection in the U.S., underscoring the mounting pressures of compliance costs and competition.
National Regulatory Crackdown Accelerates
Fraud complaints linked to crypto ATMs are rising nationwide. Minnesota has become the latest state to consider a comprehensive ban following a spike in scam reports. Several states and local governments are moving to enact stricter regulations or outright bans, citing consumer protection and financial crime concerns. The U.S. crypto ATM industry is undergoing a sharp shift from rapid expansion to stringent compliance, and legal actions like the CoinFlip case may serve as a blueprint for other jurisdictions.