The California Department of Financial Protection and Innovation (DFPI) announced a settlement agreement with Anh Management, LLC, operating as Hermes Bitcoin, on approximately May 20, 2026. Under the agreement, Hermes Bitcoin must permanently cease all digital financial asset kiosk business activity in California. The settlement resolves DFPI findings of multiple violations of the California Digital Financial Assets Law (DFAL).
California's Digital Financial Assets Law (DFAL), Cal. Fin. Code sections 3200 et seq., governs digital financial asset businesses including kiosk operators. The DFPI investigation found that Hermes Bitcoin violated DFAL from January 1, 2024 onward through the following conduct: accepting more than the $1,000 per-day cash transaction limit per customer; charging fees above DFAL-prescribed limits; failing to provide required pre-transaction disclosures to consumers; issuing receipts without required information; and operating a deficient Bank Secrecy Act and anti-money laundering compliance program.
Crypto kiosk operators in California must hold DFAL registration and comply with per-transaction fee limits, daily cash caps, pre-transaction disclosure requirements, and BSA/AML program obligations. Hermes Bitcoin operated 42 kiosks in Southern California. This action continues a DFPI enforcement series against kiosk operators: DFPI previously fined Coinme, Inc. $300,000 with $51,700 in consumer restitution, and fined LSGT Services, LLC (Coinhub) $675,000 with $105,000 in restitution.
DFPI's pattern of enforcement against kiosk operators since 2024 signals sustained supervisory attention to this sector under DFAL. Other California kiosk operators should review fee-charging practices, transaction-limit controls, receipt and disclosure procedures, and BSA/AML programs for DFAL compliance. Pending questions include how DFAL interacts with federal cryptocurrency ATM rules under FinCEN's regulations and proposed federal digital asset legislation.
Licentium advises crypto asset businesses on regulatory compliance including licensing, AML program design, and enforcement response across US jurisdictions. Please contact us to discuss your regulatory exposure. Work we undertake includes DFAL registration support, crypto kiosk regulatory analysis, BSA/AML policy review, enforcement defense, and multi-state digital asset licensing strategy.
Source: California Department of Financial Protection and Innovation, Press Release: DFPI Shuts Down Crypto Kiosk Operator for Cheating Consumers and Violating State Laws, approximately 20 May 2026, https://dfpi.ca.gov/press_release/dfpi-shuts-down-crypto-kiosk-operator-for-cheating-consumers-and-violating-state-laws/
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