Minnesota Considers Ban on Bitcoin and Crypto ATMs as Scam Reports Rise

Minnesota is reportedly looking to ban the use of Bitcoin and crypto ATMs across the state. This comes particularly as the number of scams through this means has continued to rise.

Lawmakers in Minnesota Introduce Bill to Ban Crypto ATMs

A legislator in the state, Erin Koegel, has proposed a bill that seeks to prohibit the use of virtual currency ATMs in the state following the incidence of several cases of cryptocurrency scams.

Koegel claimed that she had heard from law enforcement agencies in Minnesota that scammers used the crypto and Bitcoin ATMs to trick people into sending cryptocurrency, while legitimate traders mostly use exchanges.

This especially comes amid the growing adoption of cryptocurrency as regulations improve. For instance, earlier this week, Missouri lawmakers advanced a bill to establish its own Bitcoin reserve amid the growing trend among U.S. States.

Notably, the government of Minnesota has already enacted a law in 2024 that tries to combat scammers using the state’s Bitcoin and crypto ATMs.

For instance, the law established a $2,000 deposit limit for users of the kiosks and required companies to provide full refunds to those who were victims of fraud. However, Koegel’s bill, if enacted, may completely ban the use of the technology in the state.

Crypto Scams Continue to Dampen Regulatory Approval

As per the FBI, last year alone, victims reported losses amounting to 333 million dollars as a result of these scams involving crypto ATMs. This illustrates how widespread these scams have become.

While Minnesota made its move on banning crypto and Bitcoin ATMs, it was reported that officials from the US DOJ confiscated more than $578 million worth of digital assets from criminal groups as part of a task force’s efforts against “Southeast Asian cryptocurrency-related fraud and scams.”

Meanwhile, on Tuesday, Bitcoin Depot, which operates some of the largest crypto ATMs in the US, announced that it was launching a policy requiring ID verification for users of its machines for all transactions. The rollout of this policy, which started in February, was in response to “potential misuse,” although the company did not specify crackdowns by states on scammers.