Polygon to Acquire Bitcoin ATM Operator Coinme in Deal Valued Up to $125 Million

Highlights:

• Polygon is set to acquire Coinme to expand crypto access through Bitcoin ATMs.
• Coinme is under regulatory pressure as US authorities tighten rules on crypto kiosks.
• The deal could give Polygon regulated fiat access, but it adds compliance risk.

Polygon is reportedly close to acquiring US Bitcoin ATM operator Coinme, according to people familiar with the discussions. Sources said the potential transaction could value Coinme between $100 million and $125 million. Architect Partners is advising Polygon on the deal, while negotiations remain private. Polygon and Coinme did not comment by the time of publication. The talks reflect Polygon’s effort to expand crypto access beyond online platforms.

Polygon is an Ethereum-based layer-2 network that has been developed to support faster transactions and reduced fees. The acquisition discussions indicate the desire of Polygon to engage in physical crypto availability and controlled fiat on-ramps. The timing is also important, with regulators in the United States increasing regulation of crypto kiosks.

Polygon raised $450 million in a financing round led by Sequoia Capital India in 2023. That investment enhanced its balance sheet and strategic flexibility. As a result, the company can afford to make infrastructure-related acquisitions. The Coinme discussions are part of that general expansion plan.

Polygon to Acquire Coinme as Its Network Faces Regulatory Pressure

Coinme is one of the first Bitcoin ATM providers in the United States. The company opened its first licensed crypto kiosk in 2014 and grew via retail associations. Coinme currently has over 50,000 Bitcoin ATM in 49 states in the US. It later implemented the provision of other crypto assets at certain grocery store kiosks. This footprint makes Coinme a major provider of physical crypto access.

Regulatory pressure increased after action from Washington state authorities last month. The Department of Financial Institutions ordered Coinme to halt money transmission services in the state. Regulators alleged the company converted unredeemed customer voucher balances into corporate revenue. According to the order, customers purchased paper vouchers at kiosks and redeemed them online. When vouchers remained unredeemed, Coinme reportedly recorded the balances as income.

Washington regulators ordered Coinme to repay more than $8 million to affected customers. The agency also cited a potential $300,000 fine and possible license revocation. In addition, the order raised the risk of a ten-year industry ban for Coinme and its chief executive. Coinme has been operating kiosks in other states as it addresses the dispute. Still, the action highlights rising enforcement pressure on crypto ATM operators.

Other cases reinforce that broader trend. The District of Columbia attorney general recently sued crypto ATM operator Athena Bitcoin. The lawsuit accused the company of fueling scams and charging hidden fees. The filing alleged that 93% of Athena Bitcoin’s deposits during its first five months in Washington were fabricated.

Lawmakers in Wisconsin have also moved to tighten oversight of crypto kiosks. Senate Bill 386 was filed by Senator Kelda Roys and six other lawmakers. The proposal closely mirrors Assembly Bill 384, introduced earlier by Representative Ryan Spaude. Lawmakers cited nearly $247 million in reported crypto ATM fraud losses nationwide last year.

What the Potential Deal Means for Crypto On-Ramps and Compliance

Should the deal materialize, Polygon would have direct access to regulated retail crypto infrastructure. The existing licenses of Coinme have the potential to provide Polygon compliance frameworks in the majority of states within the US.

The recent industry transactions reflect increased concentration on the ownership of crypto infrastructure. Northern Data recently sold its Bitcoin mining subsidiary, Peak Mining, for up to $200 million. Corporate filings later identified buyers linked to Tether executives Giancarlo Devasini and Paolo Ardoino. These deals have provided greater focus on regulation and oversight of crypto infrastructure.