Minnesota moves to ban Bitcoin ATMs amid surge in elderly-targeted crypto scams

Minnesota lawmakers are weighing a statewide ban on Bitcoin ATMs and similar cryptocurrency kiosks, citing a growing link between the machines and financial scams that frequently target older and vulnerable residents.

The proposal, House File 3642, was introduced by DFL Rep. Erin Koegel and discussed Thursday by the Minnesota House Commerce Finance and Policy Committee. Lawmakers from both parties, joined by law enforcement, raised alarm about how kiosks are being used to quickly move stolen funds and make recovery difficult.

“We have heard from our law enforcement officials that they are a prime target who are looking to take advantage of our loved ones,” Koegel told the committee. Local investigators provided concrete examples of the risks. Detective Lynn Lawrence of the Woodbury Public Safety Department said crypto kiosks “remain one of the most effective tools that scammers are continuing to use to steal money.” Sgt. Jake Lanz of the St. Cloud Police Department described a case in which an elderly woman was manipulated into handing over $80,000 via a kiosk, noting that perpetrators often transfer deposits rapidly and route funds overseas, which complicates recovery.

The Minnesota Department of Commerce has signaled support for HF 3642. Sam Smith, speaking for the department, said officials back the bill and plan to roll a broader consumer protection package into the legislative process that includes the proposed ban. “The department strongly supports HF 3642. In the coming days, the department will also present a broader protection proposal that includes this ban,” Smith said.

Industry voices pushed back, however. CoinFlip, a major operator of crypto kiosks, argued in a statement to WCCO that kiosks provide an important physical access point for people entering the digital economy—similar to how bank branches and ATMs serve customers in the fiat system. The company called kiosks a practical bridge between cash and digital assets and stressed its commitment to compliance, transparency, and cooperative engagement with regulators. CoinFlip said it supports clear, consistent rules and is ready to work with Minnesota lawmakers to bolster protections while preserving consumer choice.

What are crypto kiosks? Often called Bitcoin ATMs, these are retail machines that can convert cash into cryptocurrency (and sometimes vice versa). Supporters say they expand access to crypto for users who prefer in-person, cash-based transactions. Critics and law enforcement say the machines’ speed and global transferability make them attractive tools for scammers.

The committee debate reflects growing national scrutiny of physical crypto access points as state regulators and law enforcement seek ways to curb fraud without shutting off legitimate consumer access. HF 3642’s fate will depend on further committee work and negotiations as Minnesota’s wider consumer-protection proposals are finalized.

Featured image from OpenArt, chart from TradingView.com.

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