U.S. Crypto ATM Bans and Limits Spread Amid Fraud Surge

Crypto ATM limits and bans are spreading across the United States as regulators respond to a surge in fraud and scams associated with these machines. Once hailed as a gateway for mainstream crypto adoption, these kiosks are now under intense scrutiny for enabling criminal activity, particularly targeting senior citizens. The Federal Bureau of Investigation (FBI) reported nearly 11,000 complaints in 2024 related to crypto ATM fraud, totaling over $246 million in losses [1]. As a result, several cities and states have taken action, ranging from outright bans to strict transaction limits and consumer protection mandates.

Stillwater, Minnesota, became one of the first cities to ban crypto kiosks in mid-May after a local resident lost over $5,000 to a scam. Authorities cited limited resources to investigate increasingly complex fraud cases and argued that a ban would be an effective solution. Similarly, Spokane, Washington, enacted a ban on June 17 following a surge in scam activity, with city officials noting that these kiosks had become a preferred tool for scammers [2]. Grosse Pointe Farms, Michigan, opted for a preemptive regulatory approach, imposing a $1,000 daily transaction cap and a $5,000 aggregate limit over 14 days, even though no crypto ATMs operated in the city at the time [3].

Arizona, under Governor Katie Hobbs, has taken a more measured approach. In May, the state approved legislation setting a $2,000 daily transaction limit for new users and $10,500 for returning users after 10 days, while also offering a 30-day refund period for fraud [4]. Arkansas followed suit, enacting similar limits and requiring identification and prominent fraud warnings after the state Attorney General reported over $400,000 in losses from crypto ATM scams in 2024 [5]. Colorado’s new regulations, passed in early June, also capped daily transactions for new users at $2,000 and mandated refunds for transactions sent to international wallets [6].

Iowa has taken some of the toughest measures, passing a July 1 law and filing lawsuits against two of the largest crypto ATM operators in the state—Bitcoin Depot and CoinFlip. Attorney General Brenna Bird accused the companies of enabling scams, particularly targeting elderly women, and argued that the machines facilitated illegal activity [7]. Meanwhile, Maine’s new law, passed in June, imposed a $1,000 daily limit for new users and required operators to register as money transmitters, highlighting concerns over international criminal networks exploiting vulnerable residents [8].

Maryland’s July 1 regulation came amid ongoing lawsuits against crypto ATM operator Athena Bitcoin for alleged elder abuse. The state’s law includes a $2,000 daily transaction limit for new users and mandatory registration for operators, alongside identification collection and prominent warnings [9]. Minnesota’s Department of Commerce now regulates crypto kiosks under a law that includes a $2,000 daily limit for new users and a 14-day refund period for fraud. The law was supported by AARP, which noted that the majority of victims in crypto ATM fraud cases are senior citizens [10].

Other states, including Nebraska, Oklahoma, and Rhode Island, have also introduced similar measures to control crypto ATMs. Nebraska’s law sets a $2,000 daily limit for new users and a $5,000 cap for existing customers, while Oklahoma’s bill, which became law in May, mandates blockchain analytics to monitor transactions for criminal activity [11]. Rhode Island’s new law, the Crypto ATM Fraud Prevention Act, includes a 90-day refund period for new users and requires statutory disclosures from operators [12].

The regulatory wave is not limited to smaller states. Wisconsin’s State Senate introduced legislation requiring crypto kiosk operators to collect user data and display fraud warnings, while capping transactions at $1,000 per day [13]. North Dakota’s House Bill 1447 requires operators to register as money transmitters and submit quarterly reports, signaling a growing trend of nationwide scrutiny [14].

The expanding regulatory landscape reflects growing concerns over the risks associated with crypto ATMs. With many states implementing daily transaction limits, refund protections, and mandatory disclosures, the crypto kiosk industry faces mounting compliance costs and reduced profitability. As lawmakers continue to introduce similar measures, it remains to be seen whether these steps will curb fraud or drive the industry underground [15]. The trend, however, is clear: regulators are no longer willing to tolerate the unchecked risks associated with these machines.

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