Polygon (Matic) is reportedly in talks to acquire US-based Bitcoin ATM operator Coinme in a deal valued between $100 million and $125 million. Sources familiar with the matter said that the discussions are “close to” completion, with Architect Partners acting as Polygon’s financial advisor. Both companies refused to comment when reporters reached out.
Coinme started in May 2014 with a single licensed Bitcoin kiosk. Now it runs ATMs in 49 US states. The Seattle company added more cryptocurrencies over time and put machines in grocery stores across the country.
Washington State Slapped Coinme With Legal Orders
Washington’s Department of Financial Institutions ordered Coinme to stop all money transmission last month.
The state says Coinme took over $8 million that belonged to customers and claimed it as company income. This happened through a voucher system. People bought paper vouchers at the kiosks, then went online to redeem them. Coinme apparently counted unredeemed vouchers as its own money after a certain period.
DFI says the company didn’t tell customers about redemption deadlines properly. Coinme also didn’t send unclaimed funds back to the state as the law requires.
Washington regulators want to pull Coinme’s license completely. They’re also pushing for a $300,000 fine and a 10-year ban for CEO Neil Bergquist.
Coinme fought back. The company called it an accounting disagreement over an old product they don’t offer anymore. They said they followed the same rules that apply to things like gift cards.
Late December brought some relief. Coinme cut a temporary deal with DFI to restart operations while fixing the regulatory mess. Current customers can still take out their money.
Why Does Polygon Want Bitcoin ATMs?
At first glance, this looks weird. But it actually makes sense for Polygon Matic expansion goals.
Polygon handles transactions for major brands. Starbucks uses it. So does Nike and Reddit. But those are all digital partnerships.
Coinme gives Polygon real-world locations. Thousands of them. Regular folks can walk into a 7-Eleven and buy crypto with cash. No crypto wallet needed upfront. No confusing gas fees to figure out.
Polygon pulled in $450 million during a 2023 funding round. Sequoia Capital India led that investment. That war chest could fix Coinme’s problems and cover regulatory costs.
Bitcoin ATMs bring in steady transaction fees. That’s old-school business revenue on top of blockchain fees. For Polygon, it means money from multiple sources instead of just network operations and grants.
The timing works too. Lots of Bitcoin ATM companies are struggling with new regulations. The IRS cracked down. FinCEN added more rules. Small operators quit the business. Coinme’s licenses have value, even with current legal trouble.
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What Changes for Regular Users?
Assuming the deal closes, changes should come fast. Polygon will probably let people buy MATIC tokens at Coinme ATMs. Walk up with cash, walk away with tokens.
The machines could do more than sell crypto. Picture scanning a QR code at your local grocery store to create an NFT or use a Web3 app. The crypto world has talked about mainstream adoption for years. This could actually deliver it.
For Coinme, getting bought solves money problems. Reports show the company had negative net worth from 2022 through 2024. Polygon’s cash fixes that and pays for better compliance systems.
But big questions hang over everything. Does Polygon take on all of Coinme’s legal mess? Can two very different companies actually work together? Will government agencies even approve this sale with investigations still running?
Other Networks Won’t Like This
Polygon competes with Arbitrum, Optimism, and Base from Coinbase. They’re all fighting over developers and transaction volume.
Buying Coinme separates Polygon from the pack. Other networks chase DeFi users and NFT collectors. Polygon would own actual machines in actual stores where actual regular people shop.
Then there’s the Bitcoin part. Polygon built itself for Ethereum scaling. Buying a Bitcoin company shows they’re not married to one chain anymore. Smart, since the industry is done with maximalism.
One analyst who spoke to reporters said ATM networks work as easy entry points. People without banks or people who prefer cash can still get into crypto.
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What Happens Next?
The $100-125 million price tag looks fair. Coinme brings infrastructure, state licenses, and existing customers. Physical crypto access points are rare in the US.
But closing won’t be easy. Regulators will dig deep into a blockchain company buying a money transmitter that broke rules. Polygon needs to prove it can handle compliance better than Coinme’s old management did.
The company probably needs to settle Washington’s claims first. That means paying back the $8 million to customers plus whatever fines come down.
For the Polygon Matic expansion strategy, this is a big gamble. Success creates a new blueprint for blockchain adoption. Failure becomes an expensive mistake that pulls focus from building technology.
Other crypto companies are watching. If Polygon makes this work, everyone else will chase similar deals. Physical infrastructure might become the next war zone in Layer-2 competition.
When does the deal actually close?
Nobody’s saying yet. These purchases usually drag on for months because of regulatory checks and paperwork. Coinme’s legal problems make it take even longer.
Can Polygon really clean up Coinme’s mess?
Polygon has money and big investors backing it. Whether they understand state money transmission laws better than Coinme did is anyone’s guess right now.
Will every Bitcoin ATM sell MATIC after this?
Not right away. Rolling out new features takes time. Polygon also needs to stay compliant in all 49 states where Coinme operates.
Is Polygon ditching Ethereum now?
No. This adds to what they’re already doing with Layer-2 development. They’re not abandoning Ethereum, just expanding beyond it.
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