Minnesota introduces bill to ban crypto kiosks after wave of elder fraud cases

Minnesota lawmakers on Thursday considered legislation that would prohibit cryptocurrency kiosks, citing testimony from law enforcement officials who detailed the machines' role in fraudulent schemes that have drained the savings of elderly residents and, in at least one case, pushed a victim toward housing insecurity.

Rep. Erin Koegel, who co-chairs the House Commerce Finance and Policy Committee, introduced HF 3642 earlier this week. The bill seeks to ban the placement or operation of a "virtual currency kiosk" anywhere in the state, repealing nearly two dozen sections of existing statute that currently regulate the industry.

Koegel told the House Commerce Finance and Policy Committee on Thursday that officers have described kiosks as a "prime target" for individuals seeking to exploit vulnerable residents. Woodbury Police Det. Lynn Lawrence testified that one victim on a fixed income had completed at least 10 bitcoin transactions over six months, sending roughly 50% of her monthly income to scammers and ultimately requiring intervention from adult protection services.

"She was already vulnerable with fixed income and food and housing insecurity," Lawrence said. "APS, adult protection services, had to become involved due to her dire circumstances. She was afraid she was going to have to live out of her car because she had no money left."

Sam Smith, government relations director at the Minnesota Department of Commerce, said the department "strongly supports HF 3642." The agency received 70 kiosk-related complaints last year totaling $540,000 in reported losses. About 48% of those consumers obtained a refund, averaging 16% of the total loss, according to Smith. Minnesota has about 350 licensed kiosks operated by eight to 10 companies, he added.

The proposed ban would dismantle the current regulatory framework established in 2024, which was designed to curb fraud through disclosure requirements and transaction limits. The law requires operators to warn customers that virtual currency is not legal tender, that transactions are irreversible and that losses due to fraud are generally unrecoverable.

The 2024 law also imposes a $2,000 daily transaction limit for new customers, defined as anyone who has held an account with an operator for less than 72 hours. It also requires operators to issue a full refund to new customers who were fraudulently induced to transact, provided they contact both the company and law enforcement within 14 days.

Smith told lawmakers those safeguards have proven insufficient. "Previous efforts to increase consumer protections for crypto kiosks have failed," he added. 

The proposed legislation would repeal the above provisions in full rather than amend them. Under the bill text, the prohibition applies specifically to physical kiosks. Koegel said residents would still be able to conduct cryptocurrency transactions online.

Wider crackdown 

Minnesota is not the first state to tighten oversight of the machines. In August, Illinois Governor JB Pritzker signed the Digital Asset Kiosk Act (SB 2319), which requires kiosk operators to register with state regulators, establish live customer service, and cap transaction fees at 18%. Daily transactions for new customers are limited to $2,500 under the Illinois law. 

The pivot toward restricting physical crypto access is also gaining momentum in international jurisdictions. In July 2025, New Zealand announced a ban on cryptocurrency ATMs as part of a broader overhaul of its anti-money laundering and counter-terrorist financing regime. New Zealand police identified the country's 157 machines as primary portals for illicit fund movement. 

Similarly, in October last year, Australia's Home Affairs Minister Tony Burke proposed expanding the power of the Australian Transaction Reports and Analysis Centre to restrict or prohibit "high-risk products" like crypto kiosks. Australian authorities reported the country's kiosk network grew from 23 machines to approximately 2,000 in a six-year period.