On May 18, the California DFPI announced a settlement agreement requiring a virtual currency kiosk operator to cease all digital financial asset kiosk operations in the state by May 20 for alleged violations of the state’s Digital Financial Assets Law (DFAL), the California Consumer Financial Protection Law (CCFPL), and federal anti-money laundering (AML) requirements. The settlement resolves allegations that, since January 2024, the operator, which ran 42 kiosks in Southern California, accepted more than $1,000 in cash in a single transaction in a single day from individual customers in violation of statutory transaction limits, charged fees exceeding the allowable amount on more than 3,006 transactions, failed to provide required pre-transaction disclosures, issued receipts without required information, and failed to maintain an effective BSA/AML compliance program, with the DFPI citing a “pattern” of failures with respect to verifying customer identification information.
The DFPI found that the operator failed to collect customer names for over 30 percent of processed transactions in 2024, a figure that worsened to more than 60 percent between January and April 2025, according to the agreement. Under the settlement agreement, the operator must cease all California operations by May 20, refrain from any digital financial asset business activity unless and until it obtains a state license, and comply with applicable consumer protection and AML requirements. The DFPI imposed a $9.9 million penalty that is suspended provided the operator complies with these terms but becomes “due and payable” within 10 days of the DFPI issuing written notice of noncompliance.
As previously covered by InfoBytes, the California DFPI ordered the operator in September 2025 to cease operations and sought $60.8 million in administrative penalties for the same alleged violations. The DFPI stated it reserves the right to reinstitute all charges if the operator does not honor the agreement’s terms.
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