Minnesota Lawmakers Push for Total Ban on Crypto ATMs Amid Rising Elder Scams
By Staff Reporter | March 1, 2026
Minnesota legislators are advancing a bold measure to outlaw cryptocurrency ATMs statewide, targeting machines blamed for fueling sophisticated scams that have drained tens of thousands of dollars from vulnerable residents, particularly the elderly.
HF 3642: A Sweeping Prohibition
House File 3642, introduced on February 23, 2026, by DFL Representative Erin Koegel of Spring Lake Park, seeks to prohibit the “placement or operation of virtual currency ATMs” across the entire state. The bill also aims to repeal the regulatory framework established in 2024, which lawmakers now deem insufficient.[1][2][4]
The proposal was laid out and discussed in the Minnesota House Commerce Finance and Policy Committee, where both Democrats and Republicans expressed support for curbing fraud linked to these kiosks, often mistaken for traditional Bitcoin ATMs.[4][5]
Law Enforcement Sounds the Alarm
Law enforcement officials have been vocal in their backing of the ban, describing crypto kiosks as a primary tool for scammers. Detective Lynn Lawrence of the Woodbury Public Safety Department told lawmakers, “These machines remain one of the most effective tools that scammers are continuing to use to steal money.”[4]
Sgt. Jake Lanz of the St. Cloud Police Department recounted a heartbreaking case where an elderly woman was coerced into surrendering $80,000 through a kiosk. “It’s definitely a target of our aging population,” Lanz said. “These cases are incredibly difficult for us based on how the money moves from the ATM and then transactions that typically lead overseas.”[4][5]
Authorities highlighted “pig butchering” scams—elaborate frauds where victims are groomed online before being directed to kiosks to convert cash into cryptocurrency sent to scammers’ wallets. These irreversible transactions often vanish overseas, leaving victims with little recourse.[1][3]
Consumer Advocates and State Agencies Rally Behind the Bill
The Minnesota Department of Commerce strongly endorses HF 3642. Government Relations Director Sam Smith stated, “The department strongly supports HF 3642. In the coming days, the department will also present a broader protection proposal that includes this ban.” Smith noted that the state currently licenses about 350 kiosks operated by eight to 10 companies.[4][5]
Consumer advocacy groups echo these sentiments, arguing that existing safeguards fail against “sophisticated fraud.” The bill has bipartisan appeal, with Rep. John Huot (DFL-Rosemount) comparing it to bans on cigarette vending machines for the public good.[5]
Industry Pushback: Calls for Regulation Over Prohibition
Not everyone supports a total ban. CoinFlip, one of the operators with kiosks in Minnesota, argues that the machines bridge the physical and digital economies. In a statement to WCCO, a CoinFlip spokesperson emphasized their role in the global digital economy, akin to bank ATMs.
Ben Lipka of CoinFlip testified before lawmakers, advocating for enhancements to the 2024 regulations rather than elimination. He highlighted a “cooling off” hold period for new customers, allowing transaction reversals. “I know that these tools work because we’ve got 8,000 customers in the state, we have 12,000 transactions that happened in the last year and less than 1% of those were refundable by customers,” Lipka said.[5]
Lipka urged regulators to revoke licenses from non-compliant operators instead of banning a legal product. Rep. Ron Kresha (R-Little Falls) questioned the effectiveness of past measures, noting unresolved issues like cigarette smoking despite vending machine bans.[5]
Legislative Path Ahead
For HF 3642 to become law, it must pass both the state House and Senate before reaching Governor Tim Walz for signature. The Minnesota legislative session runs until May 2026, providing time for debate and amendments.[1][2]
Rep. Koegel clarified that the ban targets only physical kiosks; online cryptocurrency transactions would remain unaffected. “We have heard from our law enforcement officials that they are a prime target who are looking to take advantage of our loved ones,” she said.[4]
Broader Context: A National Trend?
Minnesota’s proposal marks one of the strictest anti-crypto ATM measures in the U.S., amid growing national concerns over cryptocurrency fraud. Reports indicate scammers have defrauded victims out of tens of thousands per incident, with kiosks enabling quick, anonymous conversions.[1][3]
The Department of Commerce plans additional protections, signaling a multifaceted approach to consumer safety in the evolving digital finance landscape.
What’s Next?
As hearings continue, the battle pits public safety against industry innovation. Lawmakers must weigh whether regulation suffices or if a outright ban is necessary to protect Minnesotans from predatory scams. With strong enforcement support, HF 3642 appears poised for serious consideration.
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