Sterling Heights Enacts Strict Regulations on Crypto ATMs to Combat Rising Fraud Wave
STERLING HEIGHTS, Mich. – In a decisive move to shield residents from escalating cryptocurrency scams, the Sterling Heights City Council has approved a comprehensive ordinance regulating virtual currency machines, including Bitcoin ATMs. The measure, finalized after deliberation, imposes licensing requirements, transaction limits, and enhanced consumer protections amid reports of over $542,000 in local fraud losses this year.[1][2][3]
Ordinance Details and Compliance Deadline
The new rules mandate that businesses hosting crypto kiosks obtain special operator licenses and pay annual fees. Transactions now require ID verification, with first-time users capped at $2,000 daily and $10,000 monthly to curb large-scale scam deposits. Machines must display prominent fraud warnings, provide transaction receipts, and offer customer service hotlines. Operators are obligated to retain records for 90 days while safeguarding personal data, with routine city inspections to ensure compliance.[1][2][3]
Existing operators have until March 31, 2026, to meet these standards, or face license suspension or revocation. The ordinance was initially slated for approval on December 16, 2025, but council members delayed it to strengthen user limits following public input, including from AARP Michigan advocating for a $1,000 daily cap.[3]
Surge in Scams Targets Vulnerable Residents
Sterling Heights Police Department data reveals 23 fraud investigations linked to the city’s 27 crypto machines – the highest concentration in Macomb and Oakland counties – since tracking began January 1, 2025. Victims, predominantly seniors, have lost more than $542,000, with FBI estimates suggesting totals could exceed $1 million. Recent cases include two $20,000 incidents reported during ordinance discussions.[1][2]
Scammers employ tactics like romance frauds via text or social media, fake giveaways, and panic-inducing calls urging cash withdrawals for Bitcoin deposits. Once converted, funds become nearly untraceable. “One being a romance scam where somebody is texting or a Facebook page, and they text back and forth person needs money via bitcoin so they can come to the country,” explained Police Captain Colleen Hopper.[1]
“While preparing for tonight’s presentation, two cases came across my desk. $20,000 each,” said Capt. Colleen Hooper with the Sterling Heights Police Department.
– Click on Detroit report[2]
Part of a Broader Municipal Trend
Sterling Heights joins a growing number of U.S. cities regulating crypto kiosks to address fraud spikes, particularly during holiday seasons when scams proliferate. The city has launched a dedicated Police Department Crypto Task Force to investigate and educate residents. Police Chief Andrew Satterfield emphasized the ordinance’s role in reducing incidents without hindering legitimate users, who typically trade via personal devices.[1][4]
Cassie Thierfelder of AARP Michigan praised the council: “We at AARP are so grateful to you for considering this important step toward protecting your residents from crypto kiosk fraud.”[3] Council debates balanced scam prevention with access, settling on limits deemed sufficient for most users while deterring criminals.
Background on Crypto Machines and Scams
Cryptocurrency ATMs convert cash to digital assets like Bitcoin, Ethereum, or Tether, bypassing traditional banks. Their proliferation – Sterling Heights boasts more than neighboring areas – has fueled scams. Victims like local resident Kimberly Ryan, who lost her life savings, underscore the human cost.[4]
| Requirement | Details |
|---|---|
| Licensing | Business and operator licenses with annual fees |
| Transaction Limits | $2,000 daily, $10,000 monthly; stricter for first-timers |
| Verification | ID checks mandatory |
| Warnings & Support | Fraud signs, receipts, hotlines |
| Records & Inspections | 90-day retention; regular audits |
Enforcement and Reporting
Violations trigger penalties, prioritizing resident safety. Residents can report suspicions to the Sterling Heights Police Department, which urges vigilance against unsolicited crypto demands. The ordinance aims to sustain access to digital currency while fortifying defenses against fraud.[2]
As crypto adoption grows, Sterling Heights’ proactive stance sets a model for other municipalities grappling with similar threats. Officials anticipate fewer cases post-implementation, bolstering community trust in emerging financial technologies.
For more information or to report fraud, contact Sterling Heights Police at their non-emergency line.