Minnesota Lawmakers Push for Complete Ban on Crypto ATMs Amid Rising Scams

In a bid to curb cryptocurrency scams, lawmakers in Minnesota have introduced legislation that could potentially ban all crypto ATMs statewide. The proposal, backed by local police and the Department of Commerce, aims to prohibit virtual currency kiosks that accept cash or debit cards for instant crypto purchases and repeal the existing regulatory framework enacted in 2024.

The new law, House File 3642, would significantly alter the way cryptocurrency transactions are conducted in Minnesota. Under the current law, operators were required to post warnings that crypto is not legal tender and transactions are irreversible, impose a $2,000 daily limit on new customers who had held accounts for less than 72 hours, and allow refunds if fraud victims contacted the company and law enforcement within 14 days.

However, Department of Commerce officials testified that scammers have consistently bypassed these protections by coaching victims to use existing accounts or machines in neighboring states. The department recorded 70 complaints in the past year totaling $540,000 in losses; however, it is worth noting that the majority of these incidents tend to go unreported.

The problem of cryptocurrency scams has been a growing concern nationwide. Massachusetts Attorney General Andrea Joy Campbell recently sued crypto ATM operator Bitcoin Depot, alleging that the operator knowingly facilitated scams that caused over $10 million in losses for state residents. Internal company data showed that 13-16 percent of transactions were scam-related in early 2023, rising to over 50 percent of money volume through Massachusetts machines from August 2023 to January 2025.

Similarly, West Virginia's House Finance Committee advanced a bill that would license operators, set transaction limits, and mandate fraud protocols. The bill aims to address the issue of cryptocurrency scams, which have resulted in significant losses for residents, particularly the elderly. AARP West Virginia backed the bill, noting that people 60 and older accounted for more than 85 percent of reported national losses in 2024.

The problem of cryptocurrency scams has been linked to organized crime syndicates, known as "pig butchering" scams. These scammers use dating apps to build romantic relationships with victims, then steer them toward fake crypto trading platforms that display phony profits. The term "pig butchering" refers to fattening the victim emotionally before extracting everything.

The rise of cryptocurrency scams has been attributed to various factors, including the ease of use of crypto ATMs and the lack of regulation in the industry. However, some argue that restrictions on crypto ATMs are a clampdown on one of the few ways it is still possible to trade between dollars and crypto without being caught up in the surveillance state.

In contrast, truly decentralized peer-to-peer trading persists. Anyone holding cash and a smartphone can act as an informal exchange, swapping dollars for bitcoin or any other crypto asset directly on the street without a centralized database of trades for the government to tap.

While some may view the ban on crypto ATMs as an overreach by lawmakers, others see it as a necessary measure to protect consumers from scammers. As one commentator noted, "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."

In conclusion, the push for a complete ban on crypto ATMs in Minnesota highlights the growing concern over cryptocurrency scams and the need for lawmakers to take action. While the debate around regulation and freedom of choice will continue, it is clear that something needs to be done to protect consumers from scammers who are exploiting this technology.