Coinme 300K Fine Under California New Crypto Law

California has made headlines with its first enforcement action under the Digital Financial Assets Law (DFAL), fining crypto kiosk operator Coinme $300,000 for violations. Announced recently, this penalty marks a significant step in the state’s efforts to regulate the rapidly growing cryptocurrency sector. The DFPI (Department of Financial Protection and Innovation) targeted Coinme for breaching key provisions of the 2023 law, signaling a new era of oversight for digital asset businesses. This move not only highlights regulatory intent but also raises questions about compliance and consumer protection in the crypto ATM space.

Digital Financial Assets Law

Enacted in 2023 and effective from July 2025, the DFAL is California’s pioneering framework to govern digital financial asset activities. It mandates that businesses engaging with California residents, such as crypto kiosk operators, obtain a license from the DFPI. The law sets strict rules to safeguard consumers, including:

• Transaction Limits: A daily cap of $1,000 per customer for crypto ATM transactions to curb excessive exposure to fraud.

• Disclosure Obligations: Mandatory clear receipts detailing transaction fees, risks, and terms to ensure transparency.

• Licensing and Compliance: Companies must maintain records, meet net worth requirements, and submit to regular audits, with penalties up to $20,000 per day for violations.

• Stablecoin Oversight: Issuers must hold eligible securities equal to their outstanding stablecoins, subject to DFPI approval.

These requirements aim to mitigate risks from scams, which have cost Californians over $1.2 billion since 2023, and address the lack of prior regulation compared to states like New York with its BitLicense.

The DFAL’s focus on transaction limits and disclosures stems from the rise of crypto ATM scams, where fraudsters exploit kiosks to drain victims’ funds. By enforcing these rules, California seeks to protect vulnerable groups, especially seniors, who account for two-thirds of scam losses. The law also allows for restitution, as seen with Coinme’s $51,700 payment to a scammed elderly resident, adding a layer of accountability.

The Coinme Case

Coinme, a Seattle-based operator of crypto ATMs across California, faced the fine for allowing transactions exceeding the $1,000 daily limit and omitting required disclosures on receipts. This breach, the DFPI’s first under the DFAL, underscores the law’s teeth. The penalty, combined with restitution, serves as a warning to other operators that non-compliance carries steep consequences. It also reflects growing global trends, with cities like Spokane, Washington, banning crypto ATMs entirely due to fraud concerns.

For consumers, this enforcement highlights the importance of verifying kiosk compliance before use—look for clear receipts and stay within daily limits. For businesses, it’s a call to invest in robust compliance systems, potentially raising operational costs but reducing legal risks. The DFAL’s flexibility to exempt small-scale operators or innovative projects offers a balanced approach, encouraging growth while enforcing safety.

Broader Implications

Regulatory Ripple Effects

This fine could inspire other states to tighten crypto regulations, especially as scam losses climb—FBI data shows a 31% increase to $246 million in 2024. It may also push for national standards, though California’s lead positions the DFPI as a regulatory trendsetter. Critics argue the law might stifle innovation, but supporters see it as essential for mainstream adoption by building trust.

Practical Tips for Navigating Crypto ATMs

• Check Limits: Confirm daily caps with the operator to avoid issues.

• Review Receipts: Ensure all fees and terms are listed.

• Report Suspicions: Contact the DFPI if a kiosk seems non-compliant.

As crypto ATMs proliferate, adherence to DFAL standards will be key to balancing convenience with security.

California’s $300,000 fine against Coinme marks a pivotal moment under the DFAL, emphasizing strict transaction limits and disclosure requirements. This enforcement not only protects consumers but also sets a precedent for the crypto industry’s future. With the law’s focus on transparency and accountability, businesses must adapt, while users gain clearer safeguards. As regulation evolves, this case could shape how digital assets are managed nationwide.