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Reasons behind Minnesota lawmakers’ efforts to prohibit crypto ATMs

March 1, 2026

Proposed Ban on Virtual Currency ATMs in Minnesota

In an initiative involving Minnesota lawmakers, local law enforcement, and the Department of Commerce, a bill has been introduced that seeks to prohibit virtual currency ATMs throughout the state. This move comes as a response to growing concerns about fraud and financial abuse, particularly targeting seniors.

The bill, championed by Rep. Erin Kogel, is a reaction to over 70 reported cases of financial fraud, which have resulted in losses exceeding $540,000 by 2025. It aims to eliminate the use of virtual currency kiosks—often referred to as “crypto ATMs”—that allow transactions with cash and debit cards.

A specific incident led to this legislative effort: police were called to a gas station where an elderly woman was found confused at a virtual currency kiosk. Subsequent inquiries revealed that she had been giving away half of her monthly income to scammers, putting her at risk of homelessness.

Authorities note that scammers frequently target older individuals, using phony identities and emotional manipulation to persuade them to relinquish their pensions and retirement savings.

The allure of cryptocurrencies for fraudsters is clear—converting digital currency makes tracking these transactions challenging for law enforcement. However, crypto companies are opposing the proposed ban, arguing it unfairly penalizes them.

Larry Lipka, an attorney for CoinFlip, acknowledges the issue of scams but is against the legislation. He stated, “Scammers are alarming. They’re bad and they’re stealing money from Americans.” He further expressed confidence in existing safety measures, like trading limits and retention periods, highlighting that of the 12,000 transactions in the past year, less than 1% led to refunds.

Contrarily, the Department of Commerce argues that more action is required. Sam Smith, the director of government relations for the Department, noted that only 48% of consumer complaints received refunds, which average about 16% of total fraudulent amounts. This, he believes, emphasizes the need for additional legislative measures.

Currently, around 350 licensed cryptocurrency kiosks are operating in Minnesota. However, the implications of this bill could extend beyond state lines, potentially impacting digital currency companies across the nation.