Washington seeks $1.03M fine and ban for crypto kiosk operator

Washington state regulators filed a court request seeking a $1.03 million civil penalty and a ban on a company that operates cryptocurrency kiosks, alleging violations of state money-transmission and consumer-protection laws.

The filing says the firm ran walk-up kiosks that let customers buy cryptocurrencies with cash and, in some cases, sell crypto for cash without the state license required to conduct money transmission, and that it failed to meet registration and disclosure rules.

Regulators argue those kiosk services fall under Washington’s definition of money transmission, which requires companies that handle or transfer customer funds to obtain authorization, keep records and follow consumer-protection safeguards. The filing alleges the company did not comply with those requirements.

The complaint asks the court to impose civil penalties, to permanently bar the company from operating kiosks in Washington and to grant authority to order restitution to customers if the court finds they suffered losses. Regulators also seek expedited injunctive relief to stop further unlicensed activity while the case proceeds.

The filing includes information on the number and locations of kiosks and describes specific transactions the state says were conducted without proper authorization. It points to the ways kiosks process cash, transfer funds to digital wallets and sometimes handle identification or transaction records.

Regulatory scrutiny of cryptocurrency kiosks has increased as state and federal agencies assess how cash-to-crypto machines fit into existing money-transmission and consumer-protection frameworks. Operators that do not register or implement required compliance controls can face fines, injunctions and orders to cease business in jurisdictions where they lack authorization.

The enforcement action will advance through the court system, where the company may answer the complaint and present a defense. If the court grants the requested remedies, the firm would be required to stop operating kiosks in Washington and to satisfy any monetary penalties or restitution the court orders.