Missouri sues CoinFlip over Bitcoin ATM “fraud”, seeks $1.83M

Missouri Attorney General Catherine Hanaway filed a lawsuit against Bitcoin ATM operator CoinFlip, alleging the company “knowingly facilitated fraudulent transactions.” The state argues CoinFlip’s opaque and potentially predatory fees and weak consumer safeguards leave elderly users more exposed to scams. Missouri seeks to bar CoinFlip from operating in the state and to impose $1.83 million in civil penalties, along with restitution for alleged consumer losses. CoinFlip denied wrongdoing, calling the case “meritless” and saying it is properly licensed with strong consumer protections. The legal action adds to a wider U.S. crackdown on Bitcoin ATM compliance after CoinFlip’s competitor, Bitcoin Depot, filed for Chapter 11 bankruptcy. Missouri analysts reportedly identified about 350 scam cases involving the machines in the past two years, and CoinFlip runs roughly 140 kiosks in the state. For crypto traders, the immediate effect is likely limited to on/off-ramp providers and compliance sentiment around Bitcoin ATMs rather than a direct liquidity hit to BTC. Still, tougher enforcement could raise operational risk for kiosk operators, which can spill into broader risk appetite for the sector.