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The California Commissioner of Financial Protection and Innovation entered into a consent order with Bitcoin kiosk operator CoinFlip requiring at least $4,811,483 in restitution and $351,530 in disgorgement, according to vitallaw.com.
The order follows an investigation that found GPD Holdings LLC, doing business as CoinFlip, violated California Financial Code requirements on multiple occasions since Jan. 1, 2024. The findings included disclosure and fee violations, as well as customer due diligence and risk management deficiencies.
California kiosk rules set transaction and fee limits
California’s Digital Financial Assets Law limits kiosk operators to accepting or dispensing $1,000 per customer per day. Since Jan. 1, 2025, charges for a single transaction cannot exceed the greater of $5 or 15% of the digital assets’ U.S.-dollar value.
Operators must provide clear and conspicuous disclosures before a transaction. Those disclosures must include asset amounts and fees, expenses and charges in U.S. dollars, plus a warning when no method exists to reverse the transaction or provide a refund.
Kiosk receipts must identify the operator and disclose the U.S.-dollar spread between the price charged to the customer and the exchange price.
The commissioner found multiple violations and excessive charges by CoinFlip since Jan. 1, 2025. The commissioner also concluded that CoinFlip was an operator under the Digital Financial Assets Law and engaged in unlawful practices violating Financial Code Sections 90003(a)(1) and (a)(2).
Consent order sets repayment deadlines
CoinFlip agreed to refrain from prohibited practices under the consent order.
The restitution schedule requires the company to issue 50% within 90 days, another 25% within 120 days and the remaining 25% within 180 days. Disgorgement is due within 180 days of the order’s effective date.
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Source: As reported by vitallaw.com.
