Minnesota Lawmaker Introduces Bill to Ban Crypto Kiosks After Surge in Scam Reports

• Minnesota lawmakers review a bill that could ban crypto kiosks after repeated fraud cases.

• Law enforcement links bitcoin ATMs to scams that target older residents across the state.

• Bitcoin Depot adds ID checks as Minnesota considers a full crypto kiosk ban.

Minnesota lawmakers are weighing a full ban on virtual currency kiosks after reports tied the machines to rising crypto scams. The proposal surfaced during a recent session of the Minnesota House Commerce Finance and Policy Committee. Representative Erin Koegel introduced House File 3642 to restrict the use of crypto kiosks statewide. Lawmakers now debate whether tighter limits are enough or a total ban is necessary.

🚨REGULATION: MINNESOTA MOVES TO BAN ALL CRYPTO KIOSKS

Minnesota Representative, Erin Koegel, has introduced a bill that would fully outlaw all crypto kiosks in the state.

According to The Block, the bill is a response to a rising number of scams involving the machines.… pic.twitter.com/wKVAHGpQBZ

— BSCN (@BSCNews) February 28, 2026

Lawmakers target kiosk-related scams

Koegel presented the bill as a response to concerns raised by state law enforcement agencies. Authorities reported that scammers frequently direct victims to use crypto kiosks to send digital assets. These transactions often move quickly and remain difficult to trace. Moreover, victims rarely recover funds once transfers are complete.

Law enforcement officials identified older residents as common targets. Sergeant Jake Lanz of the St. Cloud Police Department addressed the committee about local investigations. He indicated that authorities have tracked repeated incidents involving Bitcoin ATMs in their jurisdiction. As a result, lawmakers intensified discussions around consumer protection.

Minnesota currently hosts about 350 licensed crypto kiosks. Several companies operate these machines, including Bitcoin Depot and Coinflip. The widespread presence of kiosks has increased their visibility in fraud investigations. Consequently, regulators now face pressure to reassess oversight tools.

Previous safeguards failed to curb fraud

Minnesota lawmakers passed a law in 2024 aimed at limiting crypto ATM abuse. That statute capped deposits at $2,000 for new users. It also required operators to issue full refunds to verified fraud victims. However, officials now question whether those safeguards sufficiently reduced scam activity.

Koegel described crypto kiosks as minimally regulated compared to centralized exchanges. She noted that legitimate traders typically prefer online platforms over physical kiosks. Meanwhile, scammers often exploit the simplicity and speed of ATM-style machines. Therefore, House File 3642 proposes eliminating kiosks entirely across the state.

The proposal marks a shift from regulation toward prohibition. Lawmakers will consider whether a ban better protects consumers than incremental reforms. The committee continues reviewing testimony and enforcement data.

Industry responds with tighter controls

Meanwhile, kiosk operators have begun adjusting their compliance policies. Bitcoin Depot recently announced mandatory ID verification for every transaction. The company started a phased rollout of the requirement in February. It cited concerns about potential misuse of its machines.

The American Association of Retired Persons reported that 17 states now require fraud safeguards for crypto ATMs. These measures include daily transaction caps and visible fraud warning notices. Even so, Minnesota lawmakers appear ready to go further than other states.

House File 3642 remains under committee review as lawmakers weigh consumer protection against access to digital assets.