- Grosse Pointe Farms, Michigan, is introducing proactive restrictions on crypto ATMs even without any current machines installed.
- Cities like Spokane and Stillwater are implementing outright bans on crypto ATMs due to their role in facilitating scams.
- Lawmakers across the U.S. are increasingly calling for more measures and protections on crypto ATMs.
The rising threat of crypto scams is leading to increased regulatory scrutiny and crackdowns on crypto ATMs across the U.S.
From the Pacific Northwest to the Midwest, local governments are taking decisive steps to restrict or eliminate the machines often heralded as fast and accessible entry points into digital currency trading.
Grosse Pointe Farms Regulates Crypto ATMs
On July 14, Grosse Pointe Farms, a city in Michigan, passed an ordinance regulating crypto ATMs , despite currently having none in operation. The proactive move followed a local resident falling victim to a crypto ATM scam in a neighboring town.
Key points from the ordinance include:
- Mandatory registration with the Department of Public Safety.
- Business license requirements for operators.
- Warning labels on ATMs about scams and crypto volatility.
- Transaction limits for new users: capped at $1,000/day and $5,000 over two weeks.
Cities That Have Fully Banned Crypto ATMs
Spokane, Washington
On Monday, June 18, the Spokane City Council voted unanimously to remove all virtual currency kiosks within the city.
City officials cited widespread scam activity and consumer losses totaling hundreds of millions of dollars in Washington alone.
“This ordinance will protect vulnerable Spokane residents from scams involving virtual currency kiosks, and I am proud we are the first city in the state to move this legislation forward,” said Council Member Paul Dillon.
“These kiosks have become a preferred tool for scammers looking to defraud unsuspecting victims,” he added.
Under the ordinance passed in June, operators were given 60 days to remove existing machines or face license revocation.
Stillwater, Minnesota
Stillwater, Minnesota is also moving to ban crypto ATMs, following a spree of fraud cases.
According to a report from local publication Twin Cities , there have been $213,000 in losses from 31 crypto scams since 2023 in Stillwater.
Mayor Ted Kozlowski claimed crypto ATMs “make it far too easy to prey on people, and it’s impossible to trace if we need to recover funds.”
State-Level Crypto ATM Regulations
While no state has enacted a total ban, several are introducing strict controls:
Illinois
Illinois Governor JB Pritzker is expected to propose ATM measures that his administration says will aim to crack down on scams.
According to the Chicago Sun-Times, the measures will include receipts, daily transaction limits, and fee capping to prevent extortionate changes.
“When left unregulated, crypto kiosks are often used as tools for scams that victimize the most vulnerable Illinoisans,” Pritzker said in a fact sheet, seen by the Chicago Sun-Times
“Those who are harmed by these scams have little or no ability to seek restitution or justice because of the unrestricted nature of these ATMs […] In addition, the ATMs are a common tool in laundering money for drug transactions and other illegal activities,” Pritzker added.
Vermont
On July 1, Vermont passed legislation mirroring Illinois’ measures, with added provisions:
- Mandatory refunds for scammed users
- Daily transaction limits and fee caps
- Representative Michael Marcotte commented:
Nebraska
Nebraska has also signed a law , known as the Controllable Electronic Record Fund Prevention Act.
The law requires:
- Licensing requirements for crypto ATM operators
- Transaction limits: $2,000 per day for new users
Crypto ATM Scams on Rise
The global rise of crypto ATMs in the U.S. has coincided with an increase in scams.
Data from CoinATMRadar found that the U.S. currently hosts 30,433 Bitcoin ATMs—far more than any other country, with Canada in second place with 3,610.
According to the FBI , Washington state saw $141.7 million in losses due to crypto ATM scams in 2023.
Nationwide, the total loss reached $5.6 billion.
In many unfortunate cases, fraudsters pose as government officials or bank agents targeting elderly individuals over the phone.
The scammers will claim there is an emergency that can be fixed through a nearby crypto ATM: a missed payment, a frozen bank account, or an outstanding debt.
The victim is then told to deposit money into the ATM to a wallet address which belongs to the scammer.
In May, U.S. police were called to an incident involving a 73-year-old woman who had withdrawn $20,000 to deposit into a crypto ATM at a scammer’s instruction.
