Crypto firm CoinFlip is facing a fresh set of challenges with a new lawsuit in Missouri alleging that the firm indulged in fraudulent transactions.
Media reports from Thursday highlight that Missouri Attorney General Catherine Hanaway has filed a lawsuit against the Bitcoin ATM operator with the case aimed at protecting elderly consumers from skyrocketing scams.
Missouri’s top prosecutor has accused CoinFlip, which is already facing a separate lawsuit in Iowa, of knowingly allowing fraudulent transactions to go through.
According to the statement, the company is also alleged to have made money from these activities through fees that are not very transparent and could be considered unfair or exploitative.
On the other hand, a CoinFlip representative called Hanaway’s complaint “meritless,” describing it as a misguided attack on a firm that has spent years advocating for the implementation of consumer protection legislation for cryptocurrency kiosks.
The lawsuit comes at a time when the U.S. is witnessing a growing number of legal actions nationwide against crypto ATM operators. Regulators increasingly are raising concerns that crypto ATM machines are being misused in scams, especially targeting vulnerable users and elderly.
Missouri AG moves to block CoinFlip in “Show Me State” crackdown
The lawsuit is the latest example of U.S. states stepping up action against companies that allow people to swap cash for crypto through ATMs.
Missouri Attorney General Catherine Hanaway is now trying to block CoinFlip from operating in the state, commonly known as the “Show Me State” for its cautious and no-nonsense attitude.
Along with pushing for a ban on its operations, the state is also seeking $1.83 million in civil penalties from the company.
CoinFlip, which markets itself as one of the biggest Bitcoin ATM operators in the world, says it takes consumer protection seriously. But regulators argue that its safeguards aren’t doing enough in practice.
Move comes as crypto ATM scams rise
The action by Missouri Attorney General Catherine Hanaway to push for restrictions on CoinFlip comes as crypto ATM scams are rising sharply across the U.S., especially those targeting elderly people.
In many cases, scammers pretend to be government officials, bank employees, or tech support agents and pressure victims into sending cryptocurrency. Once the money is sent, it is quickly moved and becomes almost impossible to recover.
In one case from Massachusetts, victims were even threatened with arrest over something like “missed jury duty,” creating panic and pushing them to act quickly without thinking.
Officials say the losses are already huge. FBI data shows Americans reported around $389 million in losses from these types of scams last year.
Missouri authorities also said they have tracked about 350 similar cases involving crypto ATMs over the past two years, showing how frequently these machines are being used in fraud schemes.
CoinFlip operates around 140 crypto kiosks across Missouri, often placed in everyday spots like gas stations and vape shops.
These machines allow people to quickly turn cash into cryptocurrency, but they’ve also come under scrutiny because of rising scam cases linked to them.
Across the state, there are a total of 429 Bitcoin ATMs, according to Coin ATM Radar, showing just how widely these machines have spread.
But rules vary by state. Some places, like Tennessee, have gone as far as banning Bitcoin ATMs completely in an effort to reduce fraud and protect consumers, especially those who are more vulnerable to scams.