- Statement of Charges, June 1, 2026: Washington's DFI Securities Division intends to order ATM OPS Inc. (Bitstop) and Kiosk Distributors, Inc. (Bitstop Global) to cease and desist under the Franchise Investment Protection Act
- Unregistered franchises, 2019 to 2024: neither company has ever been registered to sell franchises in Washington, and no Franchise Disclosure Document was provided
- 116 ATMs sold in 2020 to an unnamed Pennsylvania LLC under a Licensed ATM Operator Master Agreement and Asset Purchase Agreement, with a 2% fee on every transaction and a $20,000 training fee
- The franchisee matches PowerCoin in Bitcoin ATM News' analysis of PowerCoin's own terminal records, including a Kitsap Mall kiosk installed March 23, 2024
- Tentative findings: Bitstop and Bitstop Global may request a hearing before the order becomes final
Washington's securities regulator says Bitstop spent five years selling Bitcoin ATM franchises it was never registered to sell. On June 1, 2026, the Department of Financial Institutions' Securities Division issued a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist against ATM OPS Inc. (d/b/a Bitstop) and its affiliate Kiosk Distributors, Inc. (d/b/a Bitstop Global), alleging violations of the Franchise Investment Protection Act. The order is posted on DFI's enforcement page as Order No. S-24-3806-26-SC01.
The order's central transaction is a 2020 deal in which Bitstop Global sold 116 cryptocurrency ATMs to a "Pennsylvania-based limited liability company" that DFI does not name. Bitcoin ATM News compared the order's details against the internal terminal records of PowerCoin LLC, the Lancaster, Pennsylvania operator inside Daryl Heller's collapsed empire, and the records line up: a 2020 founding, more than a hundred Bitstop-branded machines PowerCoin owned and managed on KIOSK Information Systems hardware, and a kiosk installed at Kitsap Mall in Silverdale on March 23, 2024, the same "late March 2024" Kitsap County mall placement the order describes. If the franchisee is PowerCoin, the machines Chicago Atlantic accuses Bitstop of taking were machines Bitstop itself sold to PowerCoin, while keeping the software license, the branding and a cut of every transaction.
Case Information
What DFI Alleges
Tentative findings in the Statement of Charges:
- The pitch. From approximately 2019 to 2024, Bitstop and Bitstop Global offered franchises at bitstop.co/franchise as a "turnkey" business with no employees, "immediate income," low startup costs and low overhead, with ATMs "for as little as $25,000" and claimed annual revenue of up to $1.2 million and annual profits of up to $600,000.
- The contracts. In April 2020 Kiosk Distributors signed a Licensed ATM Operator Master Agreement with the Pennsylvania franchisee, which agreed to buy ATMs from Kiosk Distributors, license ATM Ops software, wrap the machines in Bitstop trademarks, pay a 2% "Licensing Fee" on all transactions processed through the software, and pay a $20,000 training fee. In August 2020 an Asset Purchase Agreement covered 116 cryptocurrency ATMs.
- What Bitstop promised in return. An operations manual, training on the platform and on compliance and legal requirements, periodic compliance-program updates, ongoing customer support, and an updated list of the franchisee's locations on Bitstop's website.
- The Washington nexus. The franchisee licensed space in a Kitsap County shopping mall in August 2023, renewed in 2024, placed a Bitstop-branded Bitcoin ATM there in late March 2024, and kept it until September 29, 2024. By May 2024 Bitstop listed the machine in the "Bitstop locations" section of its website.
- No registration, no disclosure. Neither company "is, or has ever been, registered to sell franchises in the State of Washington," and neither gave the franchisee a Franchise Disclosure Document.
DFI's legal conclusion is that the Licensed ATM Operator Master Agreement is a franchise under RCW 19.100.010: a trademark license, a marketing plan prescribed by the franchisor, and a fee. Calling the buyers "operators" rather than franchisees does not change the analysis. Washington is one of the states that requires franchise offerings to be registered before sale, and its disclosure rule tracks the federal FTC Franchise Rule, which requires a disclosure document at least 14 days before a franchisee signs or pays.
The Pitch, in Bitstop's Words
Bitstop's franchise page now returns a 404 error, but archived copies from January 2022 and February 2024 preserve it. The page invited visitors to "join an exclusive group of Bitstop Operators" and led with three promises: "Turnkey. Bitstop takes care of all the in's and out's with knowledge, training, and support. Low overhead. No employees necessary." "Immediate Income. Start generating revenue as soon as you install your first Bitstop." And "Low Start-Up Cost. Own your success for as little as $25,000."
Below that sat a tiered table. The top tier in the 2024 version listed "Machines Starting at $50,000," "Annual Revenue Potential $70k-$1.2M" and "Annual Profit Potential $35k-$600k." The 2022 version put the top tier at "$125,000+." Those are the revenue and profit figures DFI cites. Under franchise law, earnings claims of that kind must be substantiated and disclosed in Item 19 of a Franchise Disclosure Document; Bitstop, according to DFI, never produced one.
Who Is the Pennsylvania Franchisee?
The order does not name the buyer. Bitcoin ATM News believes it is PowerCoin LLC, the Lancaster, Pennsylvania company that sat inside Daryl Heller's Heller Capital Group and that Chicago Atlantic lent $30 million against in December 2023. The evidence, drawn from PowerCoin's own Site Management System export and public records:
- Timing and geography. PowerCoin LLC was founded in 2020 and is headquartered at 101 N. Queen Street in Lancaster, Pennsylvania, according to its Better Business Bureau profile. The Licensed ATM Operator Master Agreement is dated April 2020 and the Asset Purchase Agreement August 2020.
- A Bitstop fleet inside PowerCoin. PowerCoin's records contain 109 terminals either tagged with the sub-group "Bitstop - Professional World" or running on a processor labelled "Bitstop." All 109 are marked "Powercoin Owned Powercoin Managed," carry "N-series" terminal names distinct from the Coin Cloud and Margo fleets, and were installed between 2020 and 2023 (22 in 2020, 29 in 2021, 49 in 2022, 9 in 2023) across Florida, Virginia, Puerto Rico, Georgia, California, Ohio and other states. The Asset Purchase Agreement covered 116 machines.
- Bitstop's hardware. Those 109 terminals are overwhelmingly KIOSK Information Systems machines (recorded as "Kiosk.com" or "KIS," models Windfall, Windfall 1.5 and ATM17012). KIOSK Information Systems has manufactured Bitstop's ATM hardware since a partnership announced at the NRF Big Show in January 2019, and the order describes the franchisee buying ATMs from Kiosk Distributors and licensing ATM Ops software.
- The Kitsap Mall kiosk. PowerCoin terminal C03320-0, at Kitsap Mall, 10315 Silverdale Way NW, Silverdale, sits in Kitsap County. PowerCoin's records give it an install date of March 23, 2024, a "Margo – JLL Malls" sub-group, an ownership type of "Powercoin Owned Third Party Managed," and a last transaction on April 13, 2024. DFI's order says the franchisee placed its Bitstop-branded ATM in a Kitsap County mall "sometime in late March 2024" and that Bitstop listed it by May 2024.
- Bitstop's own words. As Bitcoin ATM News reported in March, Bitstop's Erik Halvorssen told a PowerCoin host in January 2025 that Bitstop was "absorbing PowerCoin machines," and Chicago Atlantic's complaint alleges the machines were managed day to day by Bitstop before PowerCoin's May 2024 default.
What this does to the Chicago Atlantic narrative:
- If the franchisee is PowerCoin, then Bitstop sold PowerCoin the machines in 2020, kept the software license, the trademarks and a 2% fee on every transaction, and listed the machines on its own website as "Bitstop locations" while PowerCoin owned them.
- Chicago Atlantic's December 2023 UCC-1 covered PowerCoin's equipment and merchant agreements. Machines PowerCoin bought from Bitstop Global under an Asset Purchase Agreement would be PowerCoin assets, and therefore collateral.
- Bitstop's February 2026 motion to stay the Miami case describes Bitstop as operating equipment that may belong to the Heller bankruptcy estate. The franchise structure explains how Bitstop could be both the original seller of the machines and their eventual operator.
Bitcoin ATM News has not confirmed the franchisee's identity with DFI, Bitstop or PowerCoin's bankruptcy trustee. The match rests on PowerCoin's records and public filings, not on a statement from any party.
A Different Regulator, a Different Law
Bitstop holds a Washington money transmitter license and appears on DFI's Virtual Currency Licensees list; that license is issued by DFI's Division of Consumer Services and is not at issue here. The franchise case comes from DFI's Securities Division, which administers the Franchise Investment Protection Act alongside the Securities Act. Bitcoin ATM News has not previously recorded a franchise-law action against a Bitcoin ATM operator, and the case highlights a line of exposure the industry has rarely had to consider: every operator that sells machines plus software plus branding plus a per-transaction fee to independent buyers is running a program that franchise regulators may treat as a franchise, whatever it is called.
The action also lands on a company with a growing file. Connecticut fined Bitstop $10,000 in June 2024 and Nebraska issued a cease and desist in November 2025, both for unlicensed money transmission. Ohio followed with a $10,500 consent order on July 6, 2026 covering 61 kiosks, 23 of them at former PowerCoin sites. Bitstop holds an F trust grade on this site.
What to Watch
The Statement of Charges is a notice of intent. Bitstop and Bitstop Global can request an administrative hearing under RCW 34.05; if they do not, the order states that the Securities Administrator "intends to adopt the above Tentative Findings of Fact and Conclusions of Law as final and to enter a permanent order to cease and desist," and "to impose any fines sought" and "charge any costs sought" against each respondent. The order does not specify a fine amount. Beyond Washington, the 2020 agreements were signed with a Pennsylvania company and Bitstop's program ran nationally for five years, so other franchise-registration states could examine the same contracts. And in Miami, Chicago Atlantic now has a state regulator's description of how the machines it claims as collateral were sold in the first place.