Minnesota Moves to Ban Crypto Kiosks Over Fraud

• Minnesota lawmakers introduced a bill to ban all physical crypto kiosks statewide.
• Officials cite rising elder fraud cases and $540,000 in reported losses last year.
• The proposal would repeal 2024 consumer protection rules rather than amend them.

Minnesota lawmakers are advancing legislation that would prohibit cryptocurrency kiosks across the state. The proposal follows testimony from law enforcement officials who linked the machines to a surge in elder fraud cases.

Representative Erin Koegel introduced House File 3642 earlier this week. The bill seeks to ban the placement and operation of any virtual currency kiosk in Minnesota. Lawmakers would repeal nearly two dozen statutory provisions that currently regulate the industry.

Koegel told the House Commerce, Finance, and Policy Committee that officers have identified kiosks as a prime tool for scammers targeting vulnerable residents.

Law Enforcement Details Elder Fraud Impact

Woodbury Police Detective Lynn Lawrence described cases in which elderly residents lost significant portions of their savings. One victim on a fixed income completed at least 10 Bitcoin transactions over six months. She sent roughly half of her monthly income to scammers.

Lawrence stated that the victim ultimately required assistance from adult protection services. The woman feared she would lose her housing due to the financial losses.

The Minnesota Department of Commerce reported 70 kiosk-related complaints last year, totaling $540,000 in reported losses. Approximately 48% of affected consumers received partial refunds, averaging 16% of the total loss.

Minnesota currently hosts about 350 licensed kiosks operated by eight to ten companies.

2024 Safeguards Deemed Insufficient

The state introduced regulatory laws in 2024 to control fraud. The laws required the operators to disclose that cryptocurrency is not legal tender and that the transaction is irreversible. The law also required a $2,000 daily limit for new customers and a full refund in specified fraud conditions.

It is now argued that the measures have not prevented scams. Sam Smith, government relations director at the Minnesota Department of Commerce, stated that prior consumer protection efforts have not delivered sufficient results.

House File 3642 would repeal the existing regulatory framework entirely. The ban applies specifically to physical kiosks. Residents would still retain access to online cryptocurrency transactions.

Wider National and International Crackdown

Minnesota’s plan is in line with the regulatory movement. In August, Illinois passed the Digital Asset Kiosk Act, requiring registration of operators, real-time customer support, and a maximum 18% transaction fee.

Globally, New Zealand introduced a country-wide ban on cryptocurrency ATMs in July 2025 as part of anti-money laundering regulations. In Australia, regulators have also moved to broaden their powers to control high-risk financial services, such as crypto kiosks.

Regulators are now recognizing crypto access points as possible sources of fraud. Some argue that education and regulation could be more effective than banning kiosks.

Minnesota lawmakers will continue debating the proposal in committee. If enacted, the state would join a growing list of jurisdictions tightening oversight of cryptocurrency kiosks in response to fraud concerns.

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