Why Minnesota lawmakers are trying to ban crypto ATMs
Source: Mashable Tech
Background
In a joint effort between Minnesota lawmakers, local law enforcement, and the Department of Commerce, legislation has been introduced to ban crypto ATMs across the state in response to widespread fraud and financial abuse, particularly of the elderly.
Legislative proposal
-
Bill HF3642 – sponsored by Rep. Erin Koegel – would prohibit the use of virtual‑currency kiosks or “crypto ATMs,” which also accept cash and debit cards. The bill follows 70 official complaints of financial fraud totaling over $540,000 in 2025.
Catalyst incident
The legislation was sparked by a single incident in which police responded to a call about a senior citizen who appeared confused at a gas‑station cryptocurrency kiosk. Investigation revealed she had been giving 50 % of her monthly income to scammers, leaving her on the verge of having to live out of her car.
Fraud targeting the elderly
Law enforcement says scammers often target older adults, using false identities and emotional stories to gain power over them and coerce them into parting with pensions or retirement savings.
Industry perspective
For scammers, the appeal of cryptocurrency is obvious: converting digital currency into cryptocurrency makes it all but impossible for law enforcement to trace the money and make an arrest.
The appeal of cryptocurrency (Mashable)
Larry Lipka, in‑house counsel at digital‑currency platform CoinFlip, acknowledges the problem but opposes the proposed ban.
“The scammers are vigilant. They’re terrible, and they’re stealing from Americans,” he told Gizmodo, before arguing that existing safety protocols—transaction limits and a holding period—provide sufficient protection. “I know that these tools work because we’ve got 8,000 customers in the state, we have 12,000 transactions that happened in the last year and less than 1 % of those were refundable by customers.”
Department of Commerce position
Sam Smith, government‑relations director at the Department of Commerce, points to the fact that only 48 % of consumer complaints resulted in a refund, and those refunds averaged just 16 % of the total fraud amount. He argues this evidence shows additional legislation is necessary.
Current landscape
Approximately 350 licensed cryptocurrency kiosks operate in Minnesota. Digital‑currency companies across the United States could be affected by the legal precedent this bill sets.