Minnesota lawmakers are considering a bill to implement a total ban on cryptocurrency ATMs, citing a rise in scams targeting the elderly. The proposed legislation, introduced by Rep. Erin Koegel, follows a 2024 regulatory framework and would be a first for a U.S. state, mirroring actions taken in countries like New Zealand. Law enforcement officials testified about significant financial losses, with victims nationwide reporting $333 million lost via crypto ATMs last year according to the FBI.
Minnesota legislators are weighing a total prohibition on cryptocurrency ATMs. Bill HF 3642, introduced by Rep. Erin Koegel, would ban machines that allow cash purchases of digital assets. This marks a significant shift from the state’s 2024 rules, which imposed daily transaction limits and licensing requirements.
Law enforcement officials testified that scammers frequently direct elderly victims to these machines. A detective recalled one resident who sent Bitcoin to a scammer ten times in six months, losing half her monthly income.
Approximately 430 crypto ATMs operate in Minnesota, primarily around Minneapolis. Nationally, the FBI states victims reported $333 million in losses tied to these machines last year.
CoinFlip General Counsel Larry Lipka acknowledged scams involving its machines but noted scammers use multiple tools. A police chief’s letter highlighted the extreme difficulty in recovering transferred funds.
The largest North American operator, Bitcoin Depot, recently said it would start requiring customer identification for every transaction. This followed a lawsuit from Massachusetts Attorney General Andrea Campbell alleging the company knowingly facilitated fraud.
Bitcoin Depot has pushed back, with a spokesperson telling ICIJ the firm is built on compliance. The company stated it continues to work with law enforcement to combat illicit activity.
