U.S. Cities and States Impose Crypto ATM Bans and Transaction Limits to Combat Fraud

Cryptocurrency ATMs across the United States are facing a wave of restrictions and outright bans as regulators and lawmakers intensify their focus on curbing fraud and protecting vulnerable consumers. These measures reflect a growing consensus that the machines, once celebrated as a gateway for everyday users to enter the crypto space, are increasingly being exploited by scammers. The Federal Bureau of Investigation (FBI) reported nearly 11,000 complaints in 2024 involving crypto ATMs, with losses exceeding $246 million [1]. A significant portion of these scams target senior citizens, many of whom are unfamiliar with digital transactions [2].

The response has been varied but decisive. Some cities have imposed outright bans. Stillwater, Minnesota, for instance, prohibited crypto kiosks after multiple cases of fraud, including one where a senior lost $29,000 [3]. Similarly, Spokane, Washington, banned the machines on June 17, citing the growing sophistication of scams and limited local law enforcement resources to combat them [4]. In Michigan’s Grosse Pointe Farms, even though no kiosks are currently located in the town, preemptive limits of $1,000 per day and $5,000 over 14 days were introduced to mitigate future risks [5].

Several states have adopted more nuanced regulatory approaches. Arizona’s Governor Katie Hobbs signed a law imposing daily transaction limits for new and returning users, along with a 30-day refund period for fraud [6]. Arkansas and Colorado have also introduced transaction caps and mandatory warnings. Both states have seen substantial consumer losses from crypto kiosk fraud. Arkansas reported over $400,000 in losses in 2024 alone, prompting Attorney General Tim Griffin to issue a public warning [7]. Colorado’s new law requires refunds for transactions sent to foreign wallets, addressing a key vulnerability in the system [8].

Iowa has taken a particularly aggressive stance, not only passing a regulation but also filing a lawsuit against two major operators—Bitcoin Depot and CoinFlip. Attorney General Brenna Bird accused the companies of facilitating illegal activity by taking a cut from scam transactions involving seniors [9]. Maine and Maryland have followed suit with laws mandating transaction limits, consumer registration, and mandatory disclosures to prevent further exploitation [10].

Across the Midwest and Northeast, states like Nebraska, Oklahoma, and Vermont have implemented similar caps and safeguards. Nebraska set a $2,000 daily limit for new users and a 90-day fraud refund period [11]. Oklahoma’s bill, which was initially vetoed but later passed by both legislative houses, requires blockchain analytics to prevent assets from flowing into criminal wallets [12]. Vermont’s law aims to slow down the pace of victimization by limiting daily transactions and mandating registration [13].

Wisconsin is currently considering a bill that would require crypto ATM operators to collect user data and obtain a money transmitter license, with a $1,000 daily transaction cap [14]. The bill mirrors similar legislation already in place in other states and reflects a broader legislative strategy to streamline approval across the country.

The growing regulatory attention has had a tangible impact on the crypto ATM industry. Stricter licensing requirements, transaction limits, and commission caps are raising the operational costs for businesses. Many operators that once thrived on high fees and unregulated activity are now struggling to maintain profitability [15]. The push for national-level legislation—already under consideration in Washington—suggests that the trend toward tighter controls may continue and eventually extend beyond individual states [16].

The trend underscores a broader shift in how regulators are approaching cryptocurrency. What was once seen as a symbol of financial innovation is now being treated with caution, particularly in its most accessible forms. As states and cities act independently, the possibility of a nationwide regulatory framework is gaining traction—one that seeks to balance innovation with consumer protection.

---

Sources:

[1] https://cointelegraph.com/news/crypto-atm-limits-bans-sweep-across-us?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound