Minnesota Lawmakers Push to Ban Cryptocurrency Kiosks Amid Rising Scam Losses

By Perplexity News Staff | Updated April 2026

Minnesota legislators are intensifying efforts to outlaw physical cryptocurrency kiosks, citing their heavy involvement in scams that have defrauded residents of millions, particularly seniors.[1][6]

These machines, resembling ATMs and found in gas stations, supermarkets, and convenience stores, allow users to convert cash or debit cards into cryptocurrency. However, law enforcement reports indicate they are overwhelmingly used by scam victims to send funds to fraudsters’ digital wallets, which are nearly impossible to trace.[1][6]

Woodbury Police Highlight Victim Stories

In a compelling testimony before the Minnesota House on February 26, Woodbury Public Safety Department Detective Lynn Lawrence described responding to a confused senior at a gas station kiosk. The victim had been directed by scammers to deposit funds there, a common tactic in fraud schemes.[1]

Rep. Erin Koegel (DFL) sponsors HF3642, which would prohibit these kiosks statewide while preserving online cryptocurrency transactions. “This bill would only affect physical kiosks,” Koegel emphasized during hearings.[1]

Rep. John Huot (DFL-Rosemount) compared the proposal to past bans on cigarette vending machines, arguing it prioritizes public safety over convenience.[1]

Previous Regulations Fall Short

Minnesota enacted a 2024 law to combat crypto fraud, mandating refunds for new customers victimized by scams and capping initial deposits at $2,000. Yet, scammers have adapted, instructing victims to use kiosks across state lines, such as in Wisconsin.[1]

An Iowa Attorney General’s investigation revealed that 95-98% of kiosk transactions involve active scams, underscoring their role as “fraud machines.” Minnesota now hosts about 400 such devices, with reported losses in the millions.[6]

Nationwide Push Against Kiosk Fraud

Minnesota’s initiative mirrors actions in other states. Alabama’s House Bill 303, recently passed and awaiting Gov. Kay Ivey’s signature, introduces warning labels, transaction receipts for law enforcement, separation from bank ATMs, and daily/monthly limits akin to traditional ATMs. In 2024, Alabama kiosks processed $12.5 million, with over half—$6.5 million—confirmed as fraud losses, often from seniors in bail, jury duty, or romance scams.[2]

Kansas’ House approved a protective bill 118-5, adding regulations to hinder scammers; it now awaits Senate action.[3]

Washington’s Senate Bill 5280, which passed the Senate in January 2026, proposed $2,000 daily limits and 15% fee caps but stalled in the House due to skipped votes and opposition from industry representatives like Bitcoin Depot, who argue it harms legitimate businesses without targeting fraudsters directly.[5]

AARP Sounds National Alarm

AARP reports criminals have stolen hundreds of millions nationwide via kiosks, predominantly from those over 60, with much fraud unreported. The advocacy group urges federal intervention, encouraging constituents to email U.S. Senators for action.[4]

Industry Pushback and Lawmaker Rationale

Kiosk operators contend they are not facilitating scams but are scapegoated for criminals’ actions. “It is not the kiosk operators that are facilitating these scams. It is the scammers,” one representative stated.[6]

Proponents counter that removing kiosks erects a significant barrier. “If we can get rid of these kiosks, these fraud machines, that’s a barrier now,” Koegel argued.[6]

As HF3642 advances, it represents a pivotal moment in Minnesota’s fight against this evolving threat. With scams adapting faster than regulations, lawmakers face pressure to act decisively before more victims fall prey.

This article synthesizes reports from state legislative sessions, law enforcement testimonies, and national trends as of early 2026.