The Washington State Department of Financial Institutions (DFI) is seeking to revoke the license of GPD Holdings, LLC, operating as CoinFlip, a cryptocurrency kiosk operator, citing deficient compliance practices and risk to consumers.
DFI issued a Statement of Charges alleging that more than 50 percent of CoinFlip's Washington business came from seniors and that the company's business model posed heightened risk of seniors being scammed. An examination showed CoinFlip failed to adequately protect consumers due to deficient compliance and risk management practices, the agency said.
The charges allege CoinFlip did not follow Anti-Money Laundering and Bank Secrecy Act laws; did not conduct proper due diligence on customers; did not comply with its own terms of service; did not timely review transaction alerts; did not implement sufficient transaction monitoring; did not enforce its own transaction limits; did not comply with federal reporting requirements; failed to timely file Currency Transaction Reports; did not provide required virtual currency disclosures to Washington consumers; did not provide required refunds to consumers; and provided inaccurate transaction costs.
DFI is seeking to revoke CoinFlip's license, prohibit the company and its responsible individual from operating in the industry, and order a fine of $1,029,600.
"State regulators' examination work is critical, and DFI will take action to address problems when companies fail to meet compliance expectations," said DFI Director Charlie Clark.
CoinFlip and its responsible individual have a right to request a hearing to contest the charges.