Washington state regulators have moved against GPD Holdings LLC, which operates as Coinflip, and the company’s CEO Benjamin Weiss, alleging a range of compliance failures tied to the firm’s crypto kiosk business. The Department of Financial Institutions is seeking to revoke the company’s license, impose a $1.03 million fine, require customer refunds and bar both the company and Weiss from the state’s money services industry.
The action was filed on Sept. 3 and centers on alleged violations of Washington’s Uniform Money Services Act. According to the state, the case follows a 2025 examination that found weak compliance and risk-management practices in a business regulators said carried elevated scam risk, particularly for older customers.
Claims focus on AML controls and customer checks
In its 13-page statement of charges, the Washington State Department of Financial Institutions alleges that Coinflip did not maintain adequate anti-money laundering controls. Regulators say some customers were allowed to complete transactions without required identifying information, while transaction monitoring was not sufficient for the risks involved.
The filing also alleges that transaction limits were not properly enforced and that the company accumulated a backlog of transaction alerts. Regulators further claim Coinflip submitted inaccurate regulatory reports and filed some currency transaction reports late.
Regulators also cite disclosures, reporting and bond issues
Beyond AML controls, the state alleges other weaknesses in Coinflip’s compliance framework. The charges say fee disclosures were unclear, surety bond coverage was inadequate and the company failed to promptly report certain banking relationships and legal actions.
The filing also alleges that Coinflip did not promptly report a data breach affecting Washington customers. Taken together, regulators argue those shortcomings show broader failures in oversight and risk management.
Refund order would cover transactions from September 2023
Washington is not only seeking penalties and license revocation. The proposed order would also require refunds for Washington customers who completed transactions beginning Sept. 1, 2023.
The filing says the refund plan would distinguish between age groups, and it refers to a confidential list of affected customers. Regulators also allege that Coinflip lacked a compliant refund policy and failed to return money to at least 15 customers within the required period.
State highlights senior exposure and next procedural step
According to the examination cited in the case, seniors accounted for more than half of Coinflip’s Washington business, a fact regulators linked to the higher scam risk they see in crypto kiosk activity. The filing also references similar actions taken in other states, though it does not detail them in the summary.
The charges are allegations at this stage. Coinflip has the option to request an administrative hearing to contest the claims, the proposed refunds, the license revocation, the $1.03 million fine and the requested industry bans against both the company and Weiss.
Source: news.bitcoin.com