Simply put
- Some crypto ATMs faced law enforcement action in 2025.
- Additionally, several states are taking steps against Bitcoin ATM operators.
- There have been renewed calls for restrictions from lawmakers at the Capitol.
In 2025, virtual currency ATMs will be scrutinized more closely in the U.S. as authorities and legislators seek to address the uptick in fraud associated with these machines.
Some officials took drastic measures with tools, while two attorney generals initiated legal action against major companies in the sector. Meanwhile, warnings have been issued targeting older adults from various government agencies and organizations.
Operators of crypto ATMs argue that their services are beneficial, allowing individuals to buy digital currencies with cash. However, critics contend that these companies could take further steps to help prevent older individuals from falling victim to scams, even if it negatively impacts business.
According to a study, Americans reported losses of $246 million related to crypto ATMs to the Internet Crime Complaint Center last year—a staggering 99% rise from the previous year. About 43% of these losses involved Americans aged 60 and up.
The scam itself is rather straightforward: elderly victims withdraw cash from their bank accounts, convert it into cryptocurrency through the machines, and send it to scammers posing as government or tech support representatives.
Some scams are a bit more inventive. For instance, there was a case in Massachusetts where individuals were tricked into paying in virtual currency for alleged jury duty failures.
The irreversible nature of crypto transactions makes it nearly impossible for victims to recover their money once they’ve been swindled, and the fine print of the user agreements might present additional challenges in legal settings.
In Iowa, the state Supreme Court ruled that crypto ATM operators could retain cash linked to fraudulent transactions, citing that users must represent themselves as the rightful owners of digital wallets to which they send funds.
“Once a transaction is completed, the user inputs cash and the cryptocurrency is transferred to their chosen wallet, our involvement in the transaction ends,” stated Chris Ryan, chief legal officer at Bitcoin Depot.
Bitcoin Depot claims to collaborate with law enforcement to track stolen cryptocurrency, but authorities inadvertently create more victims by breaking into machines, causing damage or financial losses multiple times annually.
Earlier this year, an incident in Texas saw law enforcement break into a Bitcoin Depot kiosk at a gas station, recovering $32,000 in cash that, according to Bitcoin Depot, actually belonged to the authorities.
“Common sense guardrails”
In Iowa, Bitcoin Depot and competitor Coinflip are under scrutiny from Attorney General Brenna Byrd, who filed a lawsuit against both companies for allegedly profiting from fraud victims while imposing “huge hidden transaction fees.”
Criticism regarding undisclosed fees has emerged, with Washington D.C. Attorney General Brian L. Schwalb also filing suit against Athena Bitcoin for exploiting consumers. He noted that some residents in the District experienced fees as high as 26%.
Schwalb’s lawsuit accuses Athena of violating consumer protection laws and argues that the warnings displayed on their machines do not adequately inform victims.
“Elderly scam victims, distressed at a gas station with cash in hand, likely do not understand terms like ‘generate’ a cryptocurrency wallet or ‘personal Bitcoin wallet,’” the complaint claims.
A spokesperson from Athena firmly rejected the allegations, stating that the company plans to defend itself in court. Bitcoin Depot and Coinflip also deny the accusations in Byrd’s lawsuit, highlighting their protocols for ID checks and the refund of transaction fees.
Senator Dick Durbin recently introduced the Crypto ATM Fraud Prevention Act, which aims to establish strict transaction limits and mandates full refunds for fraud victims who report within a designated timeframe.
Durbin mentioned that the bill implements “common sense guardrails” for protecting seniors, but it has stalled in the Republican-led Senate since being introduced in February.
Efforts to regulate crypto ATMs federally have struggled this year, according to AARP, yet over a dozen states have proposed or enacted regulations to establish transaction limits, fraud warnings, refund options, or licensing requirements for operators.
In June, a nonprofit advocating for seniors reported that twenty states are tackling the fraud associated with crypto ATMs, and the organization continues to collaborate with legislators in other states to adopt similar protective measures.
Around the same time, Spokane’s City Council introduced a ban on cryptocurrency ATMs, affecting approximately 50 kiosks in that area.
A few months later, Illinois became the first Midwestern state to introduce legislation aimed at reducing fraud linked to crypto ATMs, requiring operators to register with state regulators and limiting transaction fees to 18% while capping new users’ daily transactions at $2,500.
In August, the Treasury Department’s Financial Crimes Enforcement Network issued an emergency alert regarding virtual currency ATMs, citing an “increasing risk of illegal activities” from operators failing to comply with the Bank Secrecy Act.
By mid-November, roughly 30,750 cryptocurrency ATMs were in operation throughout the U.S., representing 78% of global kiosks, with the global count stable at around 40,000 since 2022.
While local governments in the U.S. pursue restrictions on crypto kiosks, some nations, such as New Zealand, have prohibited them outright to combat criminal finance.
