Washington State DFI Takes Action Against Bitcoin Depot Operating, LLC

Olympia – The Washington State Department of Financial Institutions (DFI) issued a Statement of Charges (Charges) against Bitcoin Depot Operating, LLC, alleging Bitcoin Depot’s crypto kiosks charged customers up to 42% more than market price and that the company profited from consumers being scammed.

Bitcoin Depot recently filed for bankruptcy. Washington State consumers who have a claim against Bitcoin Depot may file a claim in the bankruptcy case and may submit complaints about crypto kiosk issues via DFI’s online complaint form. 

DFI’s Charges follow an investigation that showed most of the WA consumers who were scammed and lost money by using Bitcoin Depot’s ATMs were over 60 years old. The Charges also allege that Bitcoin Depot:

• Did not follow Anti-Money Laundering (AML) and Bank Secrecy Act (BSA) laws; 
• Did not monitor for suspicious activity and fraud; 
• Did not follow its own Know Your Customer (KYC) policies or verify customers’ identity; 
• Did not protect consumers against bad actors and failed to conduct due diligence until a customer put more than $100,000 in cash into a kiosk; 
• Did not record all customer information required by law; 
• Did not follow legal requirements for its BDCheckout product; 
• Did not provide WA customers required disclosures about fees in more than 30,000 transactions. 

“DFI will take action to hold companies accountable when serious violations such as these are discovered,” DFI Director Charlie Clark said. “Washington will not allow such businesses to profit by enabling fraud and charging excessive and undisclosed fees while ignoring regulatory requirements.”

Based on the alleged violations of the Uniform Money Services Act, DFI seeks to revoke Bitcoin Depot’s license, prohibit the company and its responsible individual from the industry, and order the company’s responsible individual to pay a fine of $1.5 million. Washington law requires companies pick a responsible individual to manage the business and who is liable for violations of the law. This is one of the most significant fines sought by DFI due to the high number and nature of the alleged violations. Bitcoin Depot and its responsible individual both have a right to request a hearing to contest DFI’s Charges. 

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