A Minnesota lawmaker has introduced a bill that could ban virtual currency kiosks statewide following reports of scams tied to the machines.
Representative Erin Koegel told the House Commerce Finance and Policy Committee that House File 3642 targets what she called the “novel” and “minimally regulated” technology of crypto kiosks. Koegel said state law enforcement has reported scammers commonly use kiosks to trick residents into sending cryptocurrency, while legitimate traders generally prefer centralized exchanges.
“Because of the nature of cryptocurrency, these fraudulent transactions are often irreversible and incredibly hard to track,” Koegel said, adding the bill offers “an opportunity to work across party lines to protect the people of Minnesota from irreversible financial crimes.”
Law enforcement testimony at the committee hearing underscored those concerns. Sergeant Jake Lanz of the St. Cloud Police Department said Bitcoin ATMs have become a notable problem in his jurisdiction and are a frequent target for scams aimed at older residents.
Minnesota already passed a 2024 law aimed at curbing kiosk fraud, setting a $2,000 deposit limit for new users and requiring operators to issue full refunds to fraud victims. Koegel’s proposal, however, would go further by potentially banning the machines entirely within the state.
The House says Minnesota has about 350 licensed crypto kiosks operated by several companies, including Bitcoin Depot and Coinflip. The American Association of Retired Persons reported in February that 17 states have laws requiring crypto ATM operators to implement fraud protections such as daily transaction limits and mandatory fraud warning signs.
Separately, Bitcoin Depot, one of the largest U.S. crypto ATM operators, announced a phased rollout beginning in February to require ID verification for every transaction at its machines in response to “potential misuse.” The company did not explicitly link the change to state-level crackdowns.
Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy
