MV Capital - Missouri Sues CoinFlip Over Crypto ATM Fraud and Hidden Fees

State Attorney General Targets Major Operator for Enabling Scams Targeting Vulnerable Residents

Missouri Attorney General Catherine Hanaway has filed a lawsuit against GPD Holdings LLC, operating as CoinFlip, accusing the company of facilitating fraudulent transactions through its network of cryptocurrency ATMs and charging excessive, poorly disclosed fees. The action reflects growing state-level efforts to address risks associated with crypto kiosks across the United States.

Key Details of the LawsuitFiled in Jasper County Circuit Court against GPD Holdings LLC d/b/a CoinFlip
Seeks to ban CoinFlip operations in Missouri
Demands up to $1.826 million in civil penalties ($1,000 per violation over five years)
Calls for restitution to affected consumers
Alleges violations of the Missouri Merchandising Practices Act

Allegations of Enabling Fraud

The lawsuit claims CoinFlip knowingly allowed scammers to use its machines to move funds from victims, particularly seniors and veterans. Authorities describe crypto ATMs as tools that make recovery of stolen money nearly impossible due to the irreversible nature of cryptocurrency transactions.

"Bitcoin and crypto ATMs are the new getaway cars for fraud, whisking away innocent people’s money to scammers, never to return."Attorney General Catherine Hanaway

State officials launched an investigation into crypto ATM operators in December 2025 following numerous consumer complaints. The probe linked around 350 crypto-related cases in recent years to such kiosks. Federal Trade Commission data cited in reports shows losses from crypto ATM fraud increased nearly tenfold between 2020 and 2023.

Victim Stories Highlight Impact

The lawsuit details cases involving three Missouri residents who lost significant sums:

Documented VictimsAn 80-year-old military veteran lost between $180,000 and $200,000 after falling for a romance-investment scam, draining savings, selling his car, and nearly losing his home.
A woman targeted by fake police officers claiming warrants paid $1,000 at a CoinFlip machine despite warnings from a store employee.
Another resident lost $900 after a similar impersonation scam involving alleged arrest warrants.

In each case, victims reported limited or no clear disclosure of fees at the time of transaction, and attempts to reverse or recover funds through CoinFlip yielded minimal or no results.

Concerns Over Hidden and Excessive Fees

Authorities allege CoinFlip displays a nominal $2.99 fee on its machines while actual fees, outlined in detailed terms of service, can reach up to 21.9% of the transaction amount. For example, a $100 deposit might yield only about $75-76 in Bitcoin value. The lawsuit argues the company could easily show full fees on-screen but chooses not to, prioritizing profits from each transaction.

CoinFlip's Operations and Response

CoinFlip operates over 4,200 ATMs nationwide, including 136 in Missouri. The company positions itself as a safe option for buying cryptocurrency, citing Know Your Customer processes as safeguards against crime. Its training materials reportedly acknowledge elder financial exploitation as a growing issue.

In response to the lawsuit, CoinFlip described the claims as meritless, stating it has advocated for stronger consumer protection laws and licensing requirements in Missouri and other states. The company emphasized its efforts to support regulation aimed at stopping scammers rather than targeting licensed operators.

Broader Industry Pressure

This case is part of a wider crackdown on crypto ATMs. Other states have introduced restrictions or bans, citing similar fraud concerns. Bitcoin Depot, a major competitor with thousands of machines, recently filed for Chapter 11 bankruptcy protection amid mounting legal judgments exceeding $20 million.

Industry ContextMultiple states pursuing actions against crypto kiosk operators
Increasing calls for clearer federal standards on consumer protections
Focus on safeguards for elderly and vulnerable populations

The Missouri lawsuit will examine whether CoinFlip's warnings, policies, and compliance measures meet state consumer protection requirements. It underscores ongoing debates about balancing innovation in cryptocurrency access with effective fraud prevention.

As enforcement actions continue, regulators and industry participants face questions about the future role of physical crypto ATMs and necessary improvements in transaction transparency and security protocols.