When Neil Bergquist launched Coinme in 2014, he faced a crucial decision that would define his company’s future: whether to pursue proper licensing before launching crypto services or follow the prevalent Silicon Valley mantra of “move fast and break things.” As the CEO of what would become America’s largest licensed cryptocurrency cash network, Bergquist chose regulation first.
“Coinme has always prioritized regulatory compliance,” Bergquist explained in a recent interview. “From day one, we’ve worked with regulators to ensure our business complies with state and federal regulations.” This early commitment to working within regulatory frameworks has shaped Coinme’s growth from a single bitcoin ATM in Seattle to powering over 40,000 crypto-enabled locations across the United States.
Understanding the State-Level Landscape
The U.S. crypto regulatory environment remains notably fragmented, with different rules at the federal and state levels creating a complex network for businesses to unravel. According to Bergquist’s recent statements posted in the digital publication Payments Dive, this creates distinct challenges for companies operating across multiple jurisdictions.
“Crypto has been at the state level, so we’ve gone to every state and educated them on bitcoin and blockchain, and they’ve given us determinations,” Bergquist notes. “And what we’re seeing is a divide. Some states heavily regulate it, and some states say, ‘Bitcoin isn’t money, and we only regulate companies that touch money, so therefore, we don’t regulate you.’”
This regulatory patchwork has significant implications for businesses looking to integrate crypto services. For Coinme, obtaining proper licensing meant starting with Washington state before expanding methodically across other jurisdictions. The company secured a Washington state money transmitter license for virtual currency in April 2014, becoming one of the first licensed cryptocurrency operators in the United States.
Impact on Business Partnerships
The current regulatory environment notably influences how traditional businesses approach crypto integration. “I think there are a lot of partners that are more traditional, Fortune 1000 types that are in a wait-and-see mode from a federal regulation perspective,” Bergquist observes. Many companies remain cautious about potential regulatory backlash, with Neil Bergquist explaining, “What they don’t want to do is get heavily involved and then it turns out, ‘Oh, a regulator disagrees with that,’ and they’ve now created a headache for themselves.”
This caution extends particularly to the banking sector. “The Treasury, [the Office of the Comptroller of the Currency], and [the Financial Crimes Enforcement Network] who are regulating banks are putting a lot of pressure on banks to not have any exposure to digital currency or the industry, and that is causing banks to stay away,” Bergquist reports.
Despite these challenges, Coinme’s commitment to regulatory compliance has enabled significant business partnerships. The company’s approach centers on three key pillars: trust, accessibility, and affordability. Through obtaining proper licensing and partnering with established retailers, Coinme has built confidence among users and business partners alike, leading to groundbreaking partnerships with major retail companies.
In 2019, Coinme integrated with Coinstar kiosks, expanding from 70 to 2,100 locations across the U.S. By 2022, over 7,000 Coinme-enabled Coinstar kiosks were operating in 48 states. A subsequent partnership with MoneyGram in 2021 further expanded its network, with MoneyGram later acquiring a 4% stake in Coinme.
Future Regulatory Outlook
Looking ahead, Neil Bergquist sees positive momentum in the regulatory landscape. “We’re seeing more positive trends and momentum over the last year,” he states. “I think we’re at a point now where … it’ll continue to be positive.”
For businesses considering crypto integration, Bergquist emphasizes the importance of taking a measured, compliance-first approach. The company’s B2B crypto-as-a-service platform has been built with regulatory requirements in mind, enabling other businesses to leverage Coinme’s existing compliance framework and licenses.
This focus has paid off: Coinme now provides crypto services at more locations in the United States than the largest bank network of ATMs, with approximately 90% of the American population living within 5 miles of a Coinme location. The company recently celebrated its 10th anniversary by announcing it had surpassed $1 billion in total retail sales, achieving an average annual revenue growth rate of 164% over the decade.
For businesses looking to enter the crypto space, Neil Bergquist’s experience suggests that understanding and working within state regulations, while sometimes challenging, ultimately creates stronger foundations for long-term success. As he often points out, “Ideas are easy; execution is very difficult.” In the crypto industry, that execution increasingly depends on careful attention to regulatory requirements at both the state and federal levels.
