Minnesota Moves to Ban Crypto ATMs Over Rising Scam Concerns

• Gov. Tim Walz signed a bipartisan bill that will ban virtual currency kiosks in Minnesota later this year.
• State officials estimate Minnesota residents lost close to $1 million to crypto kiosk scams in three years.
• Around 350 virtual currency kiosks operate across Minnesota, including about 110 run by Bitcoin Depot.

Minnesota is set to ban crypto ATMs later this year after Gov. Tim Walz signed a bipartisan bill targeting virtual currency kiosks. The move follows warnings from state regulators and local law enforcement over scam losses linked to machines that sell Bitcoin and other digital assets.

Officials said fraudsters often direct victims to deposit cash into ATM-style kiosks, then convert the money into cryptocurrency. Once funds move on-chain, recovery becomes difficult, leaving older adults and other victims with limited options after the transfer.

Minnesota Acts After Rising Fraud Losses

Minnesota has about 350 virtual currency kiosks across the state. According to state officials, residents lost close to $1 million to crypto kiosk scams over the last three years, with around half of that amount reported in 2025.

Commerce officials previously told lawmakers that complaints accelerated last year. They cited 70 complaints in 2025 out of 120 over three years, showing a sharper rise in reported losses tied to kiosk-based fraud.

Notably, officials also cited national data indicating about $240 million in kiosk-related scam losses during the first half of 2025. That pace was described as roughly double the level seen in 2024.

A 2022 case involved a 78-year-old Woodbury woman who lost more than $70,000 after scammers posed as Geek Squad representatives. They directed her to withdraw money from a Wells Fargo branch and deposit it into a CoinFlip Bitcoin ATM at a gas station.

Operators Push for Regulation

Crypto kiosk operators argued for stricter rules instead of a full ban. CoinFlip, a Chicago-based operator with more than 5,500 U.S. locations and about 50 in Minnesota, urged lawmakers to adopt stronger consumer protections.

The company proposed tools such as data analytics for high-risk transactions, visible fraud warnings, live customer support, ID checks for larger transactions, daily limits, and refund requirements for scam victims.

“No one here is saying that the kiosk operators themselves are the bad actors — it’s the scammers,” CoinFlip general counsel Larry Lipka told lawmakers. He compared the issue with fraud in older financial products, including ATMs, credit cards, wire transfers, and checks.

However, lawmakers and regulators said existing safeguards have not stopped the problem. Officials said scammers guide victims through warnings and split transfers into smaller deposits to avoid limits.

Cities and States Move First

Minnesota is not the first state to ban crypto kiosks. Indiana approved a similar ban in March, while Tennessee passed a ban in April that takes effect in July.

Meanwhile, Minnesota cities had already moved against the machines. St. Paul and Stillwater approved local bans, although those ordinances drew lawsuits from kiosk operators before the state legislation gained momentum.

Bitcoin Depot, which operates about 110 ATM-style crypto kiosks in Minnesota, sued Stillwater in September. The company argued the ban would harm residents who use virtual currency kiosks, according to its complaint.

Even so, Bitcoin Depot later dropped lawsuits against Stillwater and St. Paul as the statewide ban advanced. House sponsor Rep. Erin Koegel cited an Iowa Attorney General investigation that found 98% of transactions through one kiosk operator were fraudulent, adding to support for a full ban.

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