The California Department of Financial Protection and Innovation (DFPI) announced a final consent order on 18 May 2026 against Anh Management, LLC, the operator of Hermes Bitcoin kiosks. The order required the company to cease all digital financial asset business in California by 20 May 2026. Hermes Bitcoin operated 42 crypto kiosks across Southern California. The DFPI alleged that the company processed over 3,000 non-compliant transactions and issued more than 14,000 deficient receipts. The settlement is final and in effect.
The DFPI applied the Digital Financial Assets Law at Financial Code Division 1.25, sections 3101 through 3905. The DFAL took effect 1 July 2025 and full licensure begins 1 July 2026. The agency enforced the rules in advance through the California Consumer Financial Protection Law. The order alleges violations of the DFAL's $1,000 single-day cash transaction cap at section 3601, the fee limits at section 3603, the receipt content requirements at section 3604, and the customer identification requirements at section 3605. The order also cites the federal Bank Secrecy Act customer identification program rules at 31 CFR 1010.220 for affiliated kiosk operations. Consideration includes $174,874.28 in restitution and a $1 million administrative penalty held in suspense pending compliance with the consent order.
The order reaches every digital financial asset kiosk operator that serves California consumers. Operators must respect the $1,000 single-day cash cap, the statutory fee cap, and the receipt and customer identification rules under the DFAL. Operators must collect tax identification numbers, verify customer identity, and maintain audit trails before processing transactions. Banking and payment partners that route flows to kiosk networks should review counterparty due diligence files. The DFPI has signaled that pre-license enforcement will continue and that operators relying on prior unlicensed activity face restitution and outright bans.
DFAL licensure applications open 1 July 2026 under Financial Code section 3201. Unlicensed operators may continue limited activity only under DFPI conditional approval pending license review. The consent order bars Hermes Bitcoin from any digital financial asset business in California unless the DFPI grants a license. Other states with kiosk-specific statutes, including Minnesota SF 3868 and Vermont H.659, are advancing parallel restrictions on cash-loaded crypto ATMs.
Licentium advises crypto-asset service providers and kiosk operators on state money transmitter and digital asset law compliance through a partner network across enforcement defense and licensing. Contact us to discuss DFAL filings, consent order negotiation, or pre-license remediation. Work we undertake includes DFAL license applications, BitLicense filings, federal money services business registration, BSA and AML compliance programs, transaction monitoring policies, and consumer disclosure design.
Source: California Department of Financial Protection and Innovation, "DFPI Shuts Down Crypto Kiosk Operator for Cheating Consumers and Violating State Laws," 18 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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