On October 8, 2026, the Washington State Department of Financial Institutions (DFI) announced a multistate consent order with a money transmitter and cryptocurrency kiosk operator, resolving allegations of violations of Washington’s Uniform Money Services Act and deficiencies identified during a multistate examination. The settlement requires the company to cease its cryptocurrency kiosk operations in participating jurisdictions, pay $2.5 million in penalties and costs, and implement additional compliance measures.
The settlement follows a multistate examination covering March 2023 through March 2025 and a November 2025 Washington DFI Statement of Charges. According to regulators, the company allegedly:
- Maintained deficient BSA/AML controls. The examination identified deficiencies in the company's transaction monitoring, know-your-customer procedures, suspicious activity reporting, enhanced due diligence, and recordkeeping practices under the Bank Secrecy Act (BSA).
- Failed to maintain required net worth. Washington DFI alleged that the company failed to satisfy applicable tangible net worth requirements, reporting negative tangible net worth at year-end 2022, 2023, and 2024.
- Maintained inaccurate financial records. Washington DFI alleged that the company submitted inconsistent permissible investment records and inaccurate annual and quarterly transaction volume reports.
- Improperly treated customer funds as income. Washington DFI alleged that the company recognized unredeemed cryptocurrency purchase vouchers as income without properly disclosing its practices or transferring unclaimed customer property to the state.
Under the order, the company must cease cryptocurrency kiosk operations in participating jurisdictions by January 1, 2027, pay $2.2 million in administrative penalties and $300,000 in costs, engage an independent consultant to evaluate its BSA/AML program, and implement corrective measures. The order also imposes compliance oversight requirements and provides for an additional $4 million penalty if the company fails to cease kiosk operations by the deadline. The company neither admitted nor denied the allegations.
Putting It Into Practice: The settlement adds to growing state scrutiny of cryptocurrency kiosks, following recent enforcement actions involving AML controls (previously discussed here) and legislative restrictions on kiosk operations (previously discussed here). The multistate nature of the settlement demonstrates how state regulators can coordinate enforcement actions and impose operational restrictions extending beyond monetary penalties. Money transmitters and digital asset businesses should review their AML programs, financial reporting practices, and compliance oversight procedures to address potential regulatory concerns.