The state ordered the crypto ATM company to pay $4.8 million to scam victims, and bashed federal regulators over failing to police for fraud.

California regulators demanded this week that crypto ATM operator CoinFlip pay scam victims $4.8 million in restitution for fraud that took place at the company’s machines in the state.

The state’s new Business and Consumer Services Agency, tasked with protecting consumers from financial fraud, issued a notice Thursday saying CoinFlip had violated state and federal laws by not better protecting its customers from fraud that was perpetrated through the company’s machines that exchange cash for crypto.

“An investigation by California's Department of Financial Protection and Innovation found that, over the past five years, CoinFlip failed to detect, prevent, report, and mitigate suspicious activity, paving the way for scammers to exploit Californians and steal their hard–earned money,” the California agency said in the release.

The regulators noted that some of the laws that were breached by CoinFlip are expressly to protect Californians using crypto kiosks.

CoinFlip, which is based in Chicago and was founded in 2015, says on its website that it is the world’s “largest network of cryptocurrency ATMs by transaction volume.” It offers services at some 5,500 bitcoin ATMs in six countries, including 48 states in the U.S., according to the website. About 500 of the company’s crypto kiosks exist in California, typically at grocery and convenience stores or gas stations, according to the state agency.

Crypto fraud is an expanding part of schemes that target the elderly, including in scams where criminals lure consumers to provide funds under false pretenses, sometimes asking them to transfer money.

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