Missouri officially sues CoinFlip: Crypto ATMs become tools for fraud and money laundering, seeking up to $1.826 million in damages

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Missouri Attorney General Catherine Hanaway has officially filed a lawsuit against crypto ATM operator CoinFlip, alleging that the company knowingly profited from transactions used for fraud. The state is seeking up to $1.826 million in damages and a permanent ban on the company's operations within the state. (Context: Crypto ATMs have become a new tool for scammers, with 28,000 locations across the U.S. resulting in $240 million in losses over six months.) (Background: Australia strengthens crypto ATM regulation: $5,000 AUD cash transaction limit, upgraded KYC and monitoring.) In her announcement, Hanaway used a vivid metaphor to define this major legal action against the crypto ATM industry: "Bitcoin and crypto ATMs are the new getaway cars for scammers, whisking away the hard-earned money of innocent people, never to be recovered." On May 20, the Office of the Attorney General filed the lawsuit in the Jasper County Circuit Court, accusing GPD Holdings LLC (operating as CoinFlip) of "continuing to provide a platform for criminals to succeed and collecting high fees, despite knowing that fraudulent transactions were occurring frequently." CoinFlip claims to be the "world's largest crypto ATM network," with over 140 kiosks deployed in Missouri, located in convenience stores, liquor stores, vape shops, and gas stations. The AG’s office has submitted four specific requests to the court: first, to declare that CoinFlip’s business practices violate the Missouri Merchandising Practices Act; second, to issue an injunction prohibiting CoinFlip from continuing operations in Missouri; third, to impose a civil penalty of $1,000 for each violation over the past five years, totaling up to $1.826 million; and fourth, to require CoinFlip to provide full restitution to victimized consumers. Notably, this lawsuit is not an isolated incident. In December 2025, the Hanaway office launched a state-level investigation into five crypto ATM operators, including CoinFlip, Bitcoin Depot, Byte Federal, Rockitcoin, and Athena Bitcoin. Bitcoin Depot recently filed for Chapter 11 bankruptcy protection—the company was once the largest crypto ATM operator in North America with over 9,000 locations globally, and in mid-May, it admitted to the SEC that there was "substantial doubt about its ability to continue as a going concern." The AG’s office revealed a shocking business model in the complaint: CoinFlip’s transaction fees can reach as high as 21.9%, and these fees are often presented in an obscure manner. The irreversible and difficult-to-trace nature of cryptocurrency transactions makes these kiosks a preferred money-laundering channel for fraud syndicates. According to data from the Missouri Information Analysis Center (MIAC) and the St. Louis Fusion Center, all 350 cryptocurrency-related cases recorded in Missouri over the past two years involved crypto ATMs. The Federal Trade Commission (FTC) has noted that losses from crypto ATM scams are "skyrocketing"—increasing nearly tenfold from 2020 to 2023, with reported losses exceeding $65 million in the first half of 2024 alone, and losses among those over 60 surging more than 20 times during the same period. Hanaway highlighted the most common scam script: victims receive urgent calls from individuals impersonating law enforcement or financial institutions, claiming they must immediately transfer funds via a crypto ATM to avoid arrest or account freezing—all while the scammers keep the victims on the line, preventing them from hanging up or informing family members. Although CoinFlip has issued scam warnings on X, it has clearly failed to effectively prevent criminal groups from using its machines. Missouri is not acting alone. Iowa Attorney General Brenna Bird has sued both Bitcoin Depot and CoinFlip, alleging that the two operators caused Iowa residents to lose over $20 million. Tennessee implemented stricter KYC and daily transaction limits through legislation in July 2025, Minnesota is considering a total ban on crypto kiosks, and Spokane, Washington, has taken the lead by issuing a ban, becoming the first city in the U.S. to explicitly prohibit Bitcoin ATMs. Analysts point out that the lack of a unified federal regulatory framework for crypto ATMs forces states to legislate individually to plug loopholes, leading to vastly different compliance requirements for operators across states. If the Missouri lawsuit succeeds, it could become a landmark precedent for other states to follow, further compressing the survival space for the crypto ATM industry nationwide. In contrast to the fragmented regulatory landscape in the U.S., Taiwan’s Financial Supervisory Commission (FSC) incorporated crypto ATMs into its anti-money laundering (AML) regulations in 2024, requiring operators to complete AML declarations and comply with KYC obligations. Although there are only a few dozen crypto ATMs in Taiwan, regulators have proactively closed loopholes to prevent the replication of the collective fraud patterns seen in

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