Minnesota Lawmakers Push to Ban Crypto Kiosks Amid Surge in Elder Scams
By Perplexity News Staff
February 27, 2026
In a bold move to combat rising cryptocurrency scams targeting vulnerable seniors, Minnesota lawmakers have introduced legislation to outlaw physical crypto kiosks across the state. The proposal, spearheaded by Democratic-Farmer-Labor (DFL) Rep. Erin Koegel, comes after law enforcement officials reported a sharp increase in fraud cases linked to these machines, which resemble traditional ATMs but facilitate the purchase of digital currencies.
Bill HF 3642, introduced on Thursday in the Minnesota House Commerce Finance and Policy Committee, seeks to prohibit the placement and operation of cryptocurrency kiosks statewide.[1][2][5] Rep. Koegel, who co-chairs the committee, emphasized the urgency during committee discussions, stating, “We have heard from our law enforcement officials that they are a prime target who are looking to take advantage of our loved ones.”[2]
Escalating Fraud Concerns Fuel the Ban
Minnesota is home to approximately 350 licensed crypto kiosks operated by 8 to 10 companies.[1][3][5] Last year alone, the state fielded 70 complaints related to these machines, resulting in reported losses of $540,000.[1][3] Scammers exploit the kiosks by directing victims—often elderly individuals—to insert cash or debit cards, converting the funds into cryptocurrency sent to wallets controlled by fraudsters. This leaves victims with irreversible losses, as crypto transactions are notoriously difficult to reverse.
Detective Lynn Lawrence from the Woodbury Public Safety Department testified that scammers have adapted to countermeasures, even instructing victims to cross state lines to Wisconsin kiosks to evade Minnesota’s protections.[2][5] Similarly, St. Cloud Police reported that more than half of their investigated cases involved kiosks outside the state’s regulatory reach.[5] “The scammers are vigilant. They’re terrible and they’re stealing from Americans,” said another official during hearings.[5]
The Minnesota Department of Commerce strongly backs HF 3642 and plans to unveil broader consumer protection measures in the coming days, incorporating the kiosk ban as a cornerstone.[1][2][3][4] Government relations director Sam Smith highlighted a “sharp increase in scams involving these kiosks,” noting collaboration with law enforcement and municipalities.[4]
Background: 2024 Regulations Fall Short
Minnesota enacted cryptocurrency safeguards in 2024 under Minnesota Statutes section 53B.75, mandating disclosures, refunds for new customers victimized by fraud, and a $2,000 daily transaction limit for first-time users.[5][6] These rules aimed to curb abuse, but fraud persists. Companies must now refund affected new customers, yet scammers bypass limits by directing repeat visits or out-of-state transactions.[5]
Despite the regulations, cities have seen a “drastic increase” in incidents, prompting some to enact local bans or stricter ordinances under their authority to promote public safety.[6] Rep. John Huot (DFL-Rosemount) compared the proposed statewide ban to prohibitions on cigarette vending machines, arguing it serves the public good.[5] Republican Rep. Ron Kresha (R-Little Falls) voiced skepticism, noting unresolved issues with past analogies like cigarettes.[5]
Industry Pushback: Defending Access to Crypto
Crypto kiosk operators, such as CoinFlip, oppose the outright ban. In a statement to CBS Minnesota, CoinFlip argued that kiosks bridge the physical and digital economies, akin to bank ATMs, and enable consumer participation in emerging finance.[2] The company highlighted its track record: 8,000 customers, 12,000 transactions last year, with less than 1% requiring refunds.[5]
“It is inappropriate to ban a legal product because fraud is happening. Not our fault,” a company representative asserted, urging regulators to enforce existing rules by revoking licenses from non-compliant operators rather than eliminating the technology.[5] HF 3642 would repeal the 2024 framework entirely, shifting all crypto transactions online, which Rep. Koegel clarified would remain permissible.[5]
Bipartisan Momentum and Next Steps
Committee hearings on February 26 revealed bipartisan concern, with both parties signaling intent to address kiosk-related scams.[2][4] An amended version of HF 3642 advanced after discussion, reflecting “growing momentum” for stronger protections, particularly for older Minnesotans.[4][5] The bill now heads toward further legislative review, potentially reaching the governor’s desk.
As crypto adoption grows nationally, Minnesota’s debate underscores tensions between innovation and consumer safety. Local governments, advised by experts like League of Minnesota Cities attorney Josie Rosene, are navigating their regulatory powers cautiously to avoid conflicts with state law.[6] With the Department of Commerce poised to expand proposals, the state could set a precedent for nationwide efforts to rein in crypto fraud.
This push arrives amid broader U.S. scrutiny of cryptocurrency’s vulnerabilities. While kiosks facilitate quick access, their role in scams has lawmakers prioritizing prevention over regulation. Victims’ stories of financial ruin continue to drive urgency, as Minnesota weighs banning a tool that, for some, represents the future of money.