A Bitcoin ATM sign spotted at a gas station near Pasadena, California, on July 16, 2025.
According to the FBI, around $240 million was lost to crypto ATM fraud during the first half of 2025, which is roughly double the incidence of similar fraud in 2024. This uptick in crypto ATM fraud has prompted some policymakers to propose bans while others wonder why these machines are so prevalent across the country.
Spokane Police Detective Tim Schwering began noticing a rise in crypto-related crimes in 2023. “We started seeing a cascade of cases where people were being defrauded by virtual currency machines,” he shared. The money lost often ends up in countries like China, Russia, and Nigeria. “I couldn’t contact anyone and couldn’t get my money back,” he said, highlighting the devastating impact on Spokane residents.
One individual reportedly lost $900,000 to a questionable cryptocurrency ATM. Tragically, at least two people ended their lives after losing their savings. Schwering explained how foreign scammers, sometimes posing as romantic interests, target the elderly or isolated individuals who may be more vulnerable. In some cases, fraudsters impersonated government officials, threatening victims with IRS action. Sadly, once victims deposit large sums into these machines, there’s often no recourse.
In response, detectives initiated outreach in nursing homes and community centers, educating people about the risks of scams associated with cryptocurrency ATMs. “My job is to protect people, and it’s frustrating because most criminals operate overseas where arresting them isn’t feasible. We can at least advocate for policy changes,” Schwering noted.
Japan’s largest virtual currency ATM ban
This is when Spokane City Councilman Paul Dillon became involved, initially supporting a statewide ban that ultimately failed in Congress. “We wanted to explore local options,” Dillon explained. As Schwering’s investigations into crypto fraud continued, Dillon proposed a city ordinance to ban crypto ATMs. “A compelling case pushed us to take action. Despite differing ideologies on the City Council, we unanimously passed the ban, and I’m proud of that,” he remarked.
The ban became effective in June, and companies are currently utilizing the grace period to dismantle their machines.
Spokane’s ban stands as one of the first in the U.S., following a similar ordinance in Stillwater, Minnesota, where residents faced similar fraud. “We haven’t had any complaints regarding the removal,” Dillon reported, expressing hope for a statewide ban in the upcoming legislative session to prevent machines from simply moving to neighboring areas.
Schwering pointed out that Spokane is just 20 minutes from Idaho, and he believes a federal ban—though Dillon thinks that’s unlikely—would be the ultimate solution. Meanwhile, states across the spectrum, including Arizona and Vermont, are either tightening laws or contemplating new restrictions on ATMs. Other cities, like St. Paul, Minnesota, are also looking into outright bans similar to the one in Spokane.
This issue is expanding across the nation, with recent coverage highlighting cryptocurrency scammers using Circle K convenience stores as operational hubs.
Combating fraud vs. strengthening the surveillance state
Some experts, particularly those in the cryptocurrency sector, argue that simply removing ATMs won’t eliminate fraud, and widespread removal might generate unintended issues.
“While taking them away might reduce certain fraud types, it also eliminates a key public access point for financial privacy and cash-to-crypto conversion,” said Alex Davis, founder and CEO of Mavryk, a blockchain company specializing in tokenization of real-world assets. “The question isn’t whether crypto ATMs should exist, but rather if society will accept a future where every transaction is fully monitored.”
Davis believes crypto ATMs will stick around not because they’re necessarily safe, but because they address a problem the traditional financial system hasn’t solved: providing accessible, private, and seamless money movement. “Fraud is indeed a concern, but focusing solely on it overlooks broader societal issues. Many still operate in cash-heavy or underbanked environments, where these ATMs often serve as their only gateway to digital assets,” he explained.
He noted that high fees—often 10% or more—aren’t a flaw of the technology but a price for privacy and immediacy. “Certain segments of society prefer not having every transaction tracked,” he added. As traditional finance leans toward more restrictions, compliance burdens increase, and anonymity in economic activity declines. “Crypto ATMs fill the gap that banks no longer address,” Davis said.
Jared Strasser, COO of The Crypto Company, echoed similar sentiments, explaining that while crypto ATMs cater to a limited audience, they exist to meet the immediate needs of individuals, albeit at a higher cost. Strasser noted that these machines were once a vital bridge for incorporating cryptocurrencies in the U.S. when options were scarce.
However, Strasser believes the need for crypto ATMs may be declining as many cryptocurrency holders view these assets more as investments rather than currency. “This doesn’t mean there aren’t uses for other individuals, but it illustrates why these machines target a more specific audience,” he said. That transactional nature, however, makes them attractive to fraudsters.
“Crypto ATMs undeniably draw scammers due to their speed and finality. Yet that doesn’t negate their legitimate value,” he noted, adding that the same situation has long existed with wire fraud, gift cards, and traditional ATMs.
The bigger problem of not having a bank account
Lev Blade, an assistant professor at William & Mary Law School, views crypto ATMs as indicative of a broader issue. “The proliferation of BTMs reflects a troubling reality about America: it highlights the exclusion from the financial system,” Blade explained.
People denied access often resort to check cashing services and turn to cryptocurrencies as trust in conventional financial products declines. Blade pointed out that the U.S. stands out for allowing BTMs within its regulatory framework, while many other countries largely prohibit them. “This regulatory clarity enables BTMs to integrate into the existing American landscape of financial services,” he remarked.
On the demand side, the U.S. represents a vast market, with a notable unbanked population and significant remittance avenues, which explains why it hosts 80 percent of the world’s crypto ATMs. “In that regard, these machines exemplify structural shortcomings in our financial system rather than a story of innovation,” Blade said.
Strasser emphasized that all licensed Bitcoin ATMs in the U.S. must implement KYC (know your customer) and AML (anti-money laundering) protocols as mandated by the Bank Secrecy Act. He stressed that addressing the abuse issue requires enforcement and education, not just removal. “While the fraud problem is real, it doesn’t inherently diminish crypto ATMs’ value. They reflect criminal exploitation rather than a flaw in the technology,” he concluded.
In Spokane, however, Schwering remains vigilant, planning to issue citations for any crypto ATMs he encounters. He noted that sometimes victims are in denial about being scammed. In one instance, a family tried intervening when an elderly woman continued sending money to a man she met online. After a year and losing about $250,000, she still sent funds. “There’s a painful aspect to this; some just can’t accept that it isn’t real and keep investing more,” Schwering said.
