A Minnesota legislator has introduced a bill that could outlaw virtual currency kiosks across the state after officials reported a rise in scams tied to those machines. Representative Erin Koegel presented House File 3642 to the House Commerce Finance and Policy Committee, calling crypto kiosks a “novel” and largely unregulated technology that scammers exploit to trick people into sending cryptocurrency.
Koegel and law enforcement witnesses told the committee that fraudsters often steer victims toward kiosks because cryptocurrency transactions are typically irreversible and difficult to trace. She said legitimate traders usually use centralized exchanges, and argued the bill is a chance for lawmakers from both parties to strengthen consumer protections against irreversible financial crimes.
Sergeant Jake Lanz of the St. Cloud Police Department told the committee that Bitcoin ATMs have become a significant local problem and are frequently used in schemes targeting older residents.
Minnesota already enacted a 2024 law aimed at reducing kiosk-related fraud: new users face a $2,000 deposit limit and operators must provide full refunds to victims of scams. Koegel’s proposal would go further by giving the state the option to ban the machines entirely.
State regulators say roughly 350 licensed crypto kiosks operate in Minnesota, run by several firms including Bitcoin Depot and Coinflip. Nationally, the American Association of Retired Persons reported in February that 17 states require crypto ATM operators to add fraud protections such as daily transaction limits and mandatory warning signage.
In response to concerns about misuse, Bitcoin Depot announced a phased rollout beginning in February that requires ID verification for every transaction at its machines, though the company did not explicitly link that move to state-level actions.
Readers are encouraged to verify developments as the legislative process continues and as companies and regulators respond to the proposal.