Missouri’s attorney general has filed suit in Jasper County Circuit Court against a crypto ATM network for what she calls “enabling scams.”
Catherine Hanaway’s office announced the lawsuit Wednesday against GPD Holding LLC, which operates CoinFlip, for “knowingly facilitating fraudulent transactions and profiting from them with convoluted and excessive fees through cryptocurrency kiosks.” Those are often referred to as bitcoin ATMs.
According to CoinFlip’s website, the company has four bitcoin ATMs in Springfield, five in Joplin, two each in West Plains and Carthage and one each in Bolivar, Hollister, Lebanon, Marshfield, Nixa, Ozark, Webb City and Republic.
The Attorney General’s Office claims that, even though CoinFlip publicly states that its bitcoin ATMs are safe and have fraud-prevention mechanisms, scam transactions at its Missouri kiosks continue to occur regularly. Hanaway said transactions on a cryptocurrency kiosk are often accompanied by "disproportionate and poorly disclosed fees." The transactions are nonrefundable and difficult to trace, which she said makes them a preferred method of payment for scammers.
The Attorney General’s Office is asking the Court to declare that CoinFlip’s practices violate the Missouri Merchandising Practices Act; to enjoin CoinFlip from operating in Missouri; to impose civil penalties of $1,000 per violation over the past five years (up to $1,826,000); and to award restitution to consumers.
The lawsuit came after Hanaway’s office conducted a statewide investigation into companies operating cryptocurrency kiosks in Missouri.
Meanwhile, her office is spreading the word about common red flags in cryptocurrency scams. Those are:
- You receive an unexpected call or text about your accounts, a delivery or a law enforcement matter — often from a spoofed or unfamiliar number.
- The caller claims there's an urgent problem that you didn't know about and says you must pay immediately to avoid arrest, account closure or penalties.
- You are told not to tell anyone — especially your bank, family or law enforcement — because it is "confidential" or part of an ongoing investigation."
- The caller insists on staying on the line while you move money, log into accounts or complete banking transactions.
- You are directed to withdraw or bring cash and deposit it into a cryptocurrency ATM often while following step-by-step instructions from the caller.
The Attorney General's Office said Missourians who believe they have been harmed by or through the use of any cryptocurrency kiosk are encouraged to contact their local law enforcement agency, report the fraud to the FBI’s Internet Crime Complaint Center (IC3), and file a complaint at ago.mo.gov.
