Minnesota becomes third US state to ban crypto ATMs after $1 million in scam losses

Minnesota has banned crypto ATMs statewide after authorities documented nearly $1 million in kiosk scam losses between 2023 and 2025, making it the third US state to prohibit public access to cryptocurrency kiosks.

The ban set to take effect on August 1, 2026, comes as officials, law enforcement, and consumer advocates warn that criminals have increasingly exploited the machines to target vulnerable residents, especially older adults.

Under the new law, operators must fully remove publicly accessible kiosks by the end of the year, marking one of the most sweeping regulatory responses in the United States to kiosk-based crypto fraud. The Crypto ATM ban reflects a broader effort by Minnesota lawmakers to close off what they describe as a fast-growing avenue for financial exploitation.

Crypto ATM ban follows surge in kiosk scam losses

The push for the Crypto ATM ban in Minnesota follows documented cases of fraud that have left residents across the state financially devastated. According to state-reported figures cited by Fox News, authorities received 134 complaints related to crypto kiosk scams between 2023 and 2025, with total losses approaching $1 million. In 2025 alone, 70 cases accounted for more than $540,000 in losses.

Lawmakers argue that earlier regulatory measures were not enough to prevent abuse. In 2024, Minnesota introduced safeguards such as warning notices, daily transaction limits, and refund protections for first-time users. However, advocacy groups, including AARP Minnesota, said scammers quickly adapted, continuing to exploit emotional pressure tactics. This led to renewed legislative momentum that ultimately resulted in the Crypto ATM ban, passed during the 2026 session.

Officials say the Crypto ATM ban became necessary after repeated evidence showed that victims were still being guided step-by-step into transferring cash into kiosks under false pretenses, often with irreversible consequences.

Crypto ATM ban targets scam tactics used on vulnerable residents

A key driver behind the Crypto ATM ban has been the growing sophistication of scam operations targeting residents, particularly seniors. Law enforcement officials told lawmakers that victims are often manipulated over the phone while simultaneously being instructed to complete transactions at kiosks located inside everyday businesses such as gas stations and grocery stores.

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At a February legislative hearing, Woodbury Detective Lynn Lawrence described a case involving an elderly woman who was scammed over an extended period. She reportedly made multiple Bitcoin transactions over several months and was losing half of her monthly income to fraudsters while fearing financial ruin. The Crypto ATM ban was partly shaped by such testimonies, which highlighted how psychological pressure and urgency are used to override warning systems on the machines.

Detective Lawrence explained that scammers do not need to breach systems technically. Instead, they rely on maintaining control over victims through fear and urgency until cash is deposited into kiosks and converted into cryptocurrency sent to wallets controlled by criminals.

The Crypto ATM ban therefore aims to eliminate a key entry point in this scam process by removing public access to machines that allow immediate conversion of cash into irreversible digital transfers.

Industry pushback and debate over Crypto ATM ban

The Crypto ATM ban has also sparked opposition from industry stakeholders, who argue that kiosk operators should not be held responsible for criminal misuse of their services. At the same February hearing, Larry Lipka, general counsel at CoinFlip, acknowledged the scale of fraud but pushed back against the idea that kiosks themselves were the root cause.

“The company understands there is a scam problem in the United States but said kiosks are not the only avenue for scams and kiosk operators are not the bad actors.” — Larry Lipka, General Counsel, CoinFlip.

Despite such objections, lawmakers proceeded with the Crypto ATM ban, with supporters arguing that the machines are uniquely positioned at the center of scam transactions because they enable instant cash-to-crypto conversion without meaningful delay or intervention.

Minnesota now joins Indiana and Tennessee as the third U.S. state to impose a full Crypto ATM ban, reflecting growing national concern about kiosk-related fraud and consumer vulnerability.

Implementation of Crypto ATM ban and enforcement timeline

The final structure of the Crypto ATM ban sets a clear timeline for compliance. Starting August 1, 2026, virtual currency kiosks will no longer be permitted to operate in Minnesota. Operators that rely exclusively on kiosks must also settle customer balances by December 31, 2026, either in U.S. dollars based on market value or through transfers to designated crypto wallets.

The Crypto ATM ban was sponsored by Rep. Erin Koegel and Sen. Amanda Hemmingsen-Jaeger and signed into law by Governor Tim Walz on May 5, according to AARP Minnesota. The legislation reflects bipartisan concern over consumer protection, particularly for seniors who have been disproportionately affected.

Primary sources: Fox News reporting