Polygon's Bitcoin ATM Expansion: $100-125M Acquisition of Coinme

Polygon is advancing its expansion into physical cryptocurrency infrastructure through a significant acquisition. The layer-2 Ethereum network is on the verge of purchasing Coinme, a major bitcoin ATM operator in the United States, in a deal valued between $100 million and $125 million. This strategic move signals Polygon’s ambition to extend beyond its core blockchain scaling technology into consumer-accessible cryptocurrency services.

Understanding Coinme’s Bitcoin ATM Presence

Coinme operates one of the largest bitcoin ATM networks across North America, with more than 50,000 active locations spanning 49 U.S. states. Since launching its first cryptocurrency kiosk in 2014, the company has established itself as a dominant player in the bitcoin ATM sector. The company’s distributed network of physical cryptocurrency terminals represents a substantial consumer touchpoint for cryptocurrency adoption and accessibility. Through these bitcoin ATM stations, Coinme enables customers to buy and sell cryptocurrency using traditional payment methods.

The acquisition would provide Polygon with immediate access to an established physical infrastructure network, complementing its blockchain-based technology ecosystem. Architect Partners is advising Polygon throughout the transaction process, helping to structure what represents a meaningful diversification for the blockchain platform.

Regulatory Obstacles Facing Coinme’s Operations

However, the acquisition takes place amid significant compliance challenges for Coinme. The Washington State Department of Financial Institutions (DFI) has recently taken enforcement action against the company, citing improper handling of customer funds. Specifically, the regulator determined that Coinme converted unredeemed customer vouchers into corporate revenue—funds that should have been returned to customers.

The DFI has mandated that Coinme repay over $8 million to affected customers. Furthermore, the company faces potential penalties including a $300,000 fine and a ten-year operational ban for its CEO, Neil Bergquist. These regulatory complications could significantly impact Coinme’s ability to continue operating its bitcoin ATM network in one of the nation’s largest markets.

The company’s business model involved issuing paper vouchers at bitcoin ATM kiosks that could be redeemed online. When customers failed to redeem these vouchers within specified timeframes, Coinme retained the funds rather than returning them—a practice the regulator has found unacceptable.

Strategic Implications for Polygon’s Diversification

Despite these regulatory headwinds, Polygon’s move forward with the acquisition underscores confidence in the long-term value of physical cryptocurrency infrastructure. The transaction aligns with Polygon’s recent $450 million funding round, led by Sequoia Capital India, which provided substantial capital for strategic initiatives.

The acquisition represents a meaningful shift in Polygon’s strategy. Rather than remaining solely focused on Ethereum scaling technology, the network is positioning itself as a broader cryptocurrency infrastructure platform with consumer-facing presence. Coinme’s bitcoin ATM network offers Polygon a direct channel to cryptocurrency users, potentially accelerating mainstream adoption and providing revenue diversification beyond protocol services.

This expansion into physical infrastructure demonstrates how blockchain platforms are increasingly looking beyond traditional network validation and scaling solutions to capture broader roles in the cryptocurrency ecosystem. The deal, pending regulatory approval and other closing conditions, signals an industry trend toward vertically integrated cryptocurrency service platforms.