St. Paul Proposes Ban on Cryptocurrency Machines Amid Rising Fraud Concerns
ST. PAUL, Minn. — As cryptocurrency scams increasingly target vulnerable populations, the St. Paul City Council is preparing an ordinance that would ban Bitcoin and other cryptocurrency machines across the city. The move aims to stop scam artists who use these kiosks to defraud residents of thousands of dollars.
Rebecca Noecker, St. Paul City Council President, told 5 EYEWITNESS NEWS that scammers often contact victims posing as law enforcement or government officials. These con artists falsely claim victims face legal trouble or need to quickly pay to free a loved one from jail. The victims are then instructed to open digital accounts and deposit money into Bitcoin kiosks located around the city, but the funds instead go to the scammers.
“People are being duped out of thousands of dollars by clever scammers,” Noecker said. “They’re scammed and told they need to come up with hundreds of thousands of dollars just to take care of their loved one in jail. This is something affecting some of the most vulnerable folks in our society. There is zero public benefit to having these kiosks.”
The ordinance banning cryptocurrency machines is expected to be introduced in the coming weeks with hopes for approval before the end of 2025.
Scope of the Issue
The Minnesota Department of Commerce reports approximately 90 registered cryptocurrency machines operate in St. Paul alone, with more than 300 machines statewide. These kiosks allow users to purchase digital currencies like Bitcoin, Ethereum, and Litecoin with cash, often located in local grocers, gas stations, and liquor stores.
The FBI has highlighted a nationwide rise in fraud exploiting crypto ATMs. In 2023, over 5,500 cases were reported where victims lost a combined total exceeding $189 million due to scams involving cryptocurrency machines. The elderly, especially those over 60, have been identified as the most at risk demographic, losing nearly two-thirds of the reported stolen funds at crypto kiosks nationwide.
Regional Responses and Challenges
St. Paul is not alone in tackling this problem. Other Minnesota cities including Stillwater, Forest Lake, Hastings, Cottage Grove, and Woodbury have taken or are considering measures to regulate or ban cryptocurrency kiosks in response to escalating scams.
For example, Forest Lake recently implemented an ordinance requiring all crypto machines to register with the city and gave authorities the power to shut down kiosks that have been exploited by scammers multiple times within a six-month period. Stillwater has already banned crypto kiosks.
Police officers struggle to trace the digital transactions because cryptocurrency transfers are hard to track, and victims often do not receive reimbursements, placing a strain on law enforcement resources.
How the Scams Work
Scammers typically impersonate federal or local law enforcement officers, government agents, or other trusted figures to convince victims they are in serious legal trouble or that a family member is in immediate danger or jail. The scammers pressure victims to open accounts at cryptocurrency kiosks and transfer large sums of cash, which is then irretrievably lost.
These scams devastate victims financially and emotionally. Authorities and advocacy groups warn the public to remain skeptical of unsolicited calls demanding payment via cryptocurrency and to avoid using Bitcoin kiosks for such transactions.
The Road Ahead
St. Paul officials reaffirm their commitment to protecting residents, especially the most vulnerable, from fraud and financial exploitation. The forthcoming ordinance represents an effort to eliminate public access to crypto kiosks that have become tools for illicit activity across the city.
As cryptocurrency use grows, the challenge remains for municipalities and law enforcement to balance innovation with safeguarding citizens against emerging digital threats.