Coin Cafe Pays $4.3M in Restitution for Overcharging Customers

Coin Cafe charged its customers excessively high fees, which the company failed to adequately disclose. New York residents were charged tens of thousands of dollars for the company’s supposedly complimentary wallet service. Due to these fees, the agency discovered that some user account balances had been completely depleted.

Four times prior to October 2022, Coin Cafe altered its fee structure, culminating in an exorbitant fee increase. If a user did not transact cryptocurrency within a 30-day period, the company began charging them the greater of 7.99% or $99 per month. Coin Cafe forfeited $4.3 million to the agency as a consequence of its actions.

While Coin Cafe obtained the state’s BitLicense in 2023, it continued to charge its customers exorbitant fees. In addition, the company did not comply with regulations by registering with the New York Attorney General’s Office.

Now, Coin Cafe will reimburse investors, including $508,000 to 340 New York residents. The company will continue to operate, but its monthly fees must be capped at 0.002%, and its consumers must be informed of all fees.

New York Attorney General Letitia James criticized Coin Cafe’s practices and stated that this is “another example of why the cryptocurrency industry needs to be better regulated.” This announcement also mentioned James’s recently proposed crypto-specific regulation, which could lead to further enforcement.