Minnesota House Advances Cryptocurrency Kiosk Ban Amid Surging Scam Concerns
By [Your Name], Staff Writer
ST. PAUL, Minn. – A bipartisan push to ban cryptocurrency kiosks statewide is heading to the Minnesota House floor as part of a larger commerce package, driven by law enforcement reports of rampant scams targeting vulnerable residents, particularly seniors.
The legislation, **House File 3642 (HF3642)**, sponsored by Rep. Erin Koegel (DFL-Spring Lake Park), would prohibit physical virtual currency kiosks across Minnesota. These machines, resembling ATMs and found in stores statewide, allow users to buy cryptocurrency with cash or debit cards. Despite new 2024 consumer protections, scams continue to drain millions from victims[1][2][3].
Scams Fuel Bipartisan Support
During February 26 committee hearings, law enforcement officers detailed heartbreaking cases. Woodbury Public Safety Detective Lynn Lawrence testified about scams defrauding older Minnesotans of tens of thousands. Scammers direct victims to kiosks, where funds enter untraceable digital wallets controlled by fraudsters[1][5].
“Bitcoin ATMs continue to be one of the most common and damaging tools scammers are using here in Minnesota,” Lawrence said. “Minnesotans have reported millions in losses.”[6]
Minnesota has about **350 licensed kiosks** operated by 8-10 companies like Bitcoin Depot and CoinFlip. A 2024 state law (Minnesota Statutes section 53B.75) imposed $2,000 daily limits for new customers, mandatory disclosures, and refunds for fraud victims. Yet, detectives report half their cases bypass these via repeat transactions or accomplices[1][3][6].
“We have heard from our law enforcement officials that they are a prime target who are looking to take advantage of our loved ones,” Rep. Koegel stated[5].
Rep. John Huot (DFL-Rosemount) compared the ban to prohibiting cigarette vending machines in public, emphasizing public safety[1]. Co-Chair Rep. Tim O’Driscoll (R-Sartell) noted cross-aisle collaboration to refine language before session’s end[1].
State Commerce Backs Ban, Proposes More
Department of Commerce Government Relations Director Sam Smith endorsed HF3642, revealing plans for broader protections. “The department strongly supports HF3642,” Smith said. “In the coming days, the department will also present a broader protection proposal that includes this ban”[1][5].
The bill targets only physical kiosks; online crypto transactions remain legal. If passed, kiosks must be removed by year’s end[6][7].
Industry Pushback and Alternatives
CoinFlip, a major operator, opposes a full ban. “We look forward to working with the state legislature… to bolster existing consumer protections… while preserving Minnesotans’ freedom to purchase cryptocurrency,” their statement read[5].
Operators suggest enhanced refunds, transaction holds, and ID verification instead. Critics warn a ban could drive activity underground[7].
Meanwhile, a related bill, **HF3709** by Rep. Bernie Perryman, advanced to allow banks and credit unions to offer regulated crypto custodial services. “It’s about ensuring Minnesota-based institutions evolve… rather than forcing Minnesotans to rely on unregulated providers,” Perryman said. Rep. Steve Elkins (DFL-Bloomington) called it a balance of “choice, consumer protection, and competitiveness”[4].
Local Responses and Rising Fraud
Cities have acted independently, with some banning kiosks via ordinances exceeding state rules[3]. MPR News reported cryptocurrency fraud as a “growing concern,” with police from multiple departments backing the ban[2]. FOX 9 noted kiosks “popping up like ATMs,” used almost exclusively in scams[6].
One victim, featured in reports, recovered funds via the 2024 law but urged a ban to prevent future losses[6].
Path Forward
The Commerce Finance and Policy Committee laid HF3642 over for refinement but signaled strong momentum. Both parties agree on curbing kiosk-related fraud, with the bill now advancing as part of a commerce package[1][5][7].
Supporters argue prevention trumps recovery, as crypto transactions are irreversible. Lawmakers must define “kiosk,” set removal deadlines, and address retailer contracts[7].
Minnesota joins a trend; other states eye similar measures amid national scam surges. The House floor vote could reshape crypto access here, prioritizing consumer safety over convenience.
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