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So, California’s regulators are finally puffing out their chests and fining crypto ATM operators. The latest action is a perfect example: the California Regulator Fines Bitcoin ATM Operator Coinhub $675K for Violating Law. A chunk of that, about $105,000, is supposedly going back to the customers they overcharged.
Good for them. I’m sure that check will make all the difference.
Let's be real for a second. This is the fourth time the California Department of Financial Protection and Innovation (DFPI) has done this song and dance. They roll out a press release, a commissioner says some tough-sounding words about "rooting out bad actors," and the media dutifully reports it. DFPI Commissioner KC Mohseni said, “We welcome legitimate operators in this industry.” A "translation" for you: "Please, for the love of God, someone run one of these things without being a complete predator so we don't have to ban them outright."
This whole affair feels less like a serious crackdown and more like a game of regulatory whack-a-mole. For every operator they slap with a fine, two more pop up, promising the same easy on-ramp to crypto riches, conveniently located next to the lottery tickets and lukewarm hot dogs. A $675,000 fine for a company like Coinhub is a bad day at the office, not a death blow. It's the cost of doing business. But does it actually change the fundamental, predatory nature of these machines? Does it stop the next scam? Offcourse not.
The Real Price Is Paid in Gas Stations
If you want to understand the true cost of these crypto ATMs, don't look at the fines. Look at people like Diane Reynolds. She’s a retiree from Maryland who got a pop-up on her computer and a scary voice message telling her not to touch anything. A scammer, posing as tech support, convinced her that hackers had her bank account and the only way to "protect" her money was to turn it into Bitcoin.
So she did what they told her. She went to a gas station, stood in front of a machine operated by a company called Athena Bitcoin, and fed her entire life savings—$13,100—into it. Gone. Just like that. You can almost smell the stale coffee and exhaust fumes just thinking about it.
This isn't a bug in the system; it's the primary feature. The D.C. Attorney General is now suing Athena, alleging that the company knows its kiosks are being used for crime and profits from it anyway. The lawsuit claims Athena charged fees up to 26% per transaction and that a staggering 93% of all deposits made through their D.C. machines are linked to scams.
Ninety-three percent. This is a bad business model. No, 'bad' doesn't cover it—this is a criminal enterprise hiding in plain sight. We’re talking about a business where the overwhelming majority of its revenue allegedly comes from fraud. And what is Athena’s response? They "strongly disagree" and claim they have "aggressive safety protocols." I bet they do. I can’t get a decent cell signal in half the city, but somehow these scam boxes are on every corner. It’s infuriating.
The whole thing is a mess. It’s not just California or D.C. Spokane, Washington, just banned the kiosks entirely. New Zealand did the same thing back in July. Meanwhile, Australia's AUSTRAC Fines Cryptolink as Part of Crypto ATM Crackdown. Police in Massachusetts are warning people about a "missed jury duty" scam that cost two residents nearly $7,000. It’s a global problem, and the victims are almost always the most vulnerable. The FBI reported that elderly Americans lost nearly $3 billion to crypto fraud in 2024. These crypto ATM machines are the final, brutal transaction point for so many of those crimes.
So while regulators pat themselves on the back for six-figure fines, what are we actually accomplishing? Are we protecting anyone? Or are we just generating headlines that create the illusion of safety while the real damage continues, transaction by transaction, in brightly lit convenience stores across the country?
A Band-Aid on a Gushing Wound
Look, I’m not anti-crypto. I’m anti-scam. And right now, the physical crypto ATM industry feels like it's 90% scam, 10% legitimate but wildly overpriced service. These fines are theater. They’re a way for government agencies to look like they’re doing something—anything—about a problem they let fester for years. The real issue ain’t the lack of disclaimers on a receipt; it’s that these machines have become the preferred cash-out point for international crime rings targeting our grandparents. Slapping a fine on an LLC is like ticketing a getaway car for having an expired registration. You’re completely missing the point.