Minnesota Lawmakers and Police Seek Complete Ban on Crypto ATMs
Minnesota legislators, backed by native police and the Department of Commerce, have legislation introduced to ban crypto ATMs statewide. House File 3642, sponsored by Rep. Erin Koegel, reached the House Commerce Finance and Policy Committee on Thursday, and the measure would prohibit the operation of digital forex kiosks that settle for money or debit playing cards for immediate crypto purchases and repeat the related regulatory framework beforehand enacted in 2024.
That earlier regulation required operators to publish warnings that crypto isn’t authorized tender and transactions are irreversible, imposed a $2,000 each day restrict on new clients who had held accounts for lower than 72 hours, and allowed refunds if fraud victims contacted the corporate and regulation enforcement inside 14 days. Department of Commerce officers testified that scammers routinely bypass these protections by teaching victims to make use of current accounts or machines in neighboring states similar to Wisconsin. The division recorded 70 complaints within the final 12 months totaling $540,000 in losses; However, it ought to be famous that the overwhelming majority of those incidents are likely to go unreported.
Woodbury Police Det. Lynn Lawrence described one sufferer on fastened earnings who despatched roughly half her month-to-month earnings to scammers over six months via repeated bitcoin ATM transactions. “She was afraid she was going to have to live out of her car because she had no money left,” Lawrence mentioned. Sam Smith, the Commerce Department’s authorities relations director, advised lawmakers, “Previous efforts to increase consumer protections for crypto kiosks have failed.”
Larry Lipka of CoinFlip, one of many bigger operators, acknowledged the issue however opposed the outright ban. “The scammers are vigilant. They’re terrible and they’re stealing from Americans,” he mentioned, including, “It is inappropriate to ban a legal product because fraud is happening. Not our fault.” Roughly 350 licensed crypto kiosks are mentioned to function within the state underneath eight to 10 firms.
Scammers utilizing crypto ATMs to focus on the aged is a matter seen everywhere in the nation
The identical sample seems nationwide. Massachusetts Attorney General Andrea Joy Campbell sued crypto ATM operator Bitcoin Depot earlier this monthalleging the operator knowingly facilitated scams that triggered greater than $10 million in losses for state residents. Internal firm information confirmed 13 to 16 % of transactions had been scam-related in early 2023, rising to over 50 % of cash quantity via Massachusetts machines from August 2023 to January 2025. A 2021 inner evaluation had flagged that 90 % of consumers interacting with one due-diligence group had been seemingly rip-off victims. The firm responded that it disagrees with the allegations, has cooperated with regulation enforcement, and now requires identification verification on each transaction.
Over in Mainean almost $2 million settlement with Bitcoin Depot was reached, which additionally required the agency to take away all its kiosks from the state. Kansas regulators also opened an inquiry into crypto ATMs after a farm couple in Centerville misplaced $20,000 when a caller posing as Apple assist instructed the spouse to withdraw money and deposit it right into a machine in Johnson County. And West Virginia’s House Finance Committee advanced House Bill 5353 on Thursday to license operators, set transaction limits, and mandate fraud protocols after residents reported $7.6 million in losses the prior 12 months. AARP West Virginia backed the invoice, noting that folks 60 and older accounted for greater than 85 % of reported nationwide losses in 2024.
FBI figures show Nearly 11,000 crypto ATM rip-off complaints in 2024 totaling $247 million, climbing to $333 million in 2025 with out even together with December. But once more, the precise whole is probably going far larger as a result of most victims by no means report the crime.
Pig Butchering Scams are Big Business
Asian criminal syndicates have industrialized so-called “pig butchering” scamsrelying on pressured labor in compounds throughout Laos, Cambodia, and Myanmar. Trafficked staff face coercion and comply with scripts to construct romantic or pleasant relationships on courting apps, then steer targets towards faux crypto buying and selling platforms that show phoney income. Once victims ship funds, the scammers disappear. The time period “pig butchering” refers to fattening the sufferer emotionally earlier than extracting every thing. Elderly targets are continuously pushed in the direction of crypto ATMs as a result of the machines require solely money and a QR code, avoiding the necessity for on-line wallets.
One such operation lies behind a $13 billion bitcoin dispute between the United States and China. US authorities seized 127,272 bitcoin, now price about $13 billion, from Cambodian conglomerate chairman Chen Zhi as a part of the most important asset forfeiture in Justice Department historical past. Prosecutors linked the funds to pig butchering proceeds laundered via the LuBian mining pool. Chinese officers accuse the United States of orchestrating a 2020 hack of that pool.
According to a report from blockchain analytics firm Chainalysisillicit exercise extra typically rose to file ranges of round $154 billion in 2025. This was a 162% enhance from the revised 2024 whole of $57.2 billion and the best determine since monitoring started in 2020. Sanctioned nation states, similar to Iran and Venezuelaare mentioned to have pushed a lot of the surge, particularly through dollar-pegged stablecoins.
Crypto ATMs Also Targeted at Federal Level Via CLARITY Act
The Digital Asset Market Clarity Act (also referred to as the CLARITY Act) additionally targets crypto ATMs on the federal degree. Although the laws handed the House final 12 months, Senate committees postponed markups in January whereas negotiators finalized language within the invoice. A dispute over stablecoin curiosity stays a major point of friction between traditional banks and the crypto industry.
A Senate Banking Committee draft invoice (PDF) treats kiosk operators as cash transmitters topic to Bank Secrecy Act obligations, and operators should register kiosk places with the Treasury Department on a quarterly foundation. Additional necessities embody necessary disclosures and receipts, appointment of a compliance officer, identification affirmation for brand new clients, brief holding intervals earlier than giant transfers, transaction limits, refund procedures for suspected fraud, and a customer support helpline.
Privacy Advocates Push Back
Financial privateness advocates contend that restrictions on crypto ATMs are a clampdown on one of many few methods it’s nonetheless attainable to commerce between {dollars} and crypto that is not but caught up within the surveillance state. In a recent blog postthe Cato Institute’s Nick Anthony argued, “It is heartbreaking that people are being tricked by scammers into sending money through cryptocurrency ATMs . . . However, the common denominator here is that scammers are the problem. That is who the government should be going after.”
At the identical time, really decentralized peer-to-peer buying and selling persists. Anyone holding money and a smartphone can act as an off-the-cuff alternate, swapping {dollars} for bitcoin or another crypto asset instantly on the road with out a centralized database of trades for the federal government to faucet. Of course, solely the hardcore cypherpunks, driven more by philosophy, than practicality even contemplate going the additional mile to retain privateness on this regard, and the overwhelming majority of crypto exercise is increasingly centralized around fintech companies and more easily-controlled stablecoinsregardless of the very serious, longstanding security issues with this structure.
