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Virginia’s legislature has passed a bill cracking down on crypto kiosk fraud and sent it to the governor for signature, after lawmakers cited a surge in scams in which victims were tricked into depositing cash, sometimes losing thousands of dollars — through machines deliberately designed to resemble ordinary ATMs.
The legislation, introduced in response to rising fraud cases across the state, would impose licensing, transaction limits, and consumer protection requirements on operators if signed into law.
The proposed Crypto kiosks regulation framework aims to address scams facilitated through machines that allow users to deposit cash in exchange for digital assets. Supporters say the measure is designed to reduce financial losses and improve transparency, while aligning Virginia with a growing number of states introducing similar safeguards.
The Crypto kiosks regulation bill was sponsored by Delegate Michelle Maldonado, who cited a rise in scams involving crypto ATMs as the driving force behind the proposal. The legislation prohibits operators from marketing kiosks as traditional ATMs or using language that may mislead consumers into believing they function like bank cash machines.
According to Maldonado, confusion surrounding the machines has contributed to fraud. “The thing about crypto is that once it goes into the exchange, which is in the blockchain environment, there’s no way to trace it. There’s no way to get it back,” — Michelle Maldonado, Delegate, Virginia House of Delegates.
The bill introduces daily and monthly transaction caps, mandates identity verification for all transactions, and requires clear fraud warning notices displayed on the kiosks. It also imposes a 48-hour hold for new users, creating a window for potential refunds if fraud is suspected. Under the proposed Crypto kiosks regulation, operators would need to register their businesses, pay fees, and limit the charges imposed on customers.
Maldonado said the legislation was prompted in part by cases in Southwest Virginia and Fairfax County, including one instance where a resident reportedly lost about $15,000 after being directed to deposit funds into a crypto kiosk.
Lawmakers backing the Crypto kiosks regulation bill argue that fraud involving these machines has become more sophisticated. Maldonado described scenarios in which victims were instructed to deposit funds under false pretenses, including debt repayment schemes, legal trouble impersonations, and romance scams.
She noted that while only a portion of overall crypto fraud cases involve kiosks, the risk remains significant. “The small figure doesn’t mean there are no issues,” Maldonado said, adding that safeguards are needed before the problem escalates.
The proposed Crypto kiosks regulation seeks to address what she described as deceptive design elements. Many kiosks resemble traditional ATMs, potentially leading users to believe they are withdrawing funds rather than depositing cash to purchase digital assets.
Under the bill, operators must provide clearer disclosures explaining that transactions are irreversible and involve digital asset purchases rather than cash withdrawals.
Virginia is not alone in pursuing Crypto kiosks regulation. In 2025, approximately 14 states passed laws aimed at protecting consumers from crypto ATM-related scams, bringing the total number of states with such legislation to 17. While the specifics vary, many of these laws include transaction limits and mandatory fraud warnings.
Lt. Eric Calendine, a fraud investigator with the Beaufort County Sheriff’s Office in South Carolina, has worked with lawmakers in his state on similar measures. He said investigations have revealed patterns across multiple fraud categories.
Calendine noted that cases often involve jury duty scams, tech support fraud, romance schemes, and impostor tactics. He also highlighted a recurring challenge in recovering stolen funds. Victims’ money is frequently transferred to overseas destinations beyond the reach of U.S. law enforcement cooperation.
The spread of Crypto kiosks regulation initiatives across states reflects a broader effort to address emerging risks linked to digital asset infrastructure. Although transaction volumes at crypto kiosks represent a fraction of the overall crypto market, regulators argue that the machines can serve as entry points for vulnerable individuals targeted by fraudsters.
Supporters of the Virginia bill emphasize that the Crypto kiosks regulation is not intended to ban cryptocurrency access but to introduce guardrails. Maldonado described the measure as proactive, aiming to protect residents while allowing legitimate operators to continue serving customers under clearer rules.
The legislation’s 48-hour hold provision is viewed as a key consumer protection mechanism, potentially enabling victims to halt transactions before funds are permanently transferred. Fee limits and mandatory identification checks are also designed to reduce exploitation.
