Minnesota Lawmakers Move to Ban Crypto Kiosks Amid Rising Scam Losses

TLDR

• Minnesota moves to ban crypto kiosks over rising fraud losses
• Lawmakers cite elderly victims in statewide kiosk crackdown
• Regulators say 2024 crypto rules failed to stop scammers
• Police report cross-state tactics to bypass deposit limits
• Industry warns full ban could hurt legal crypto access

Minnesota moved toward a full prohibition on cryptocurrency kiosks as lawmakers advanced a bill targeting rising fraud losses across the state. The proposal directs agencies to dismantle the existing regulatory framework and remove physical kiosks used in several scam cases. Minnesota officials signaled bipartisan urgency as new evidence showed escalating harm to older residents.

Growing Pressure for a Statewide Ban

Minnesota legislators reviewed HF 3642 after hearing renewed warnings from police departments about kiosk-linked fraud. Law enforcement reported that scammers guided vulnerable residents through repeated transactions that drained essential savings. Minnesota’s Commerce Department supported the proposal because existing rules failed to prevent escalating financial damage.

The bill focuses on physical machines that convert cash into cryptocurrency and move funds into wallets controlled by scammers. Minnesota regulators explained that the 2024 safeguards did not deter criminals who used scripted instructions to bypass warnings. Officers added that scam victims often believed they were speaking with trusted authorities during the transactions.

Committee leaders said Minnesota must address the scam surge because many cases involved elderly residents with fixed incomes. Police described multiple situations where victims faced immediate financial distress after repeated kiosk use. Minnesota lawmakers stated that improving consumer protection remained the central objective of the proposed ban.

Existing Rules Prove Insufficient

Minnesota implemented new restrictions in 2024 that capped deposits, required warnings, and obligated operators to issue refunds to new customers. Authorities confirmed that scammers quickly adapted their methods and avoided the protections through small deposits and coaching tactics. Minnesota’s Commerce Department stated that current tools no longer met the scale of the threat.

Police reports revealed that scammers encouraged victims to travel to Wisconsin to avoid Minnesota’s transaction limits. Officers added that many cases exceeded refund eligibility because scammers prolonged contact until victims crossed the protection window. Minnesota’s data showed that only a small share of losses were ever recovered.

Lawmakers acknowledged that refund requirements helped some families yet remained too narrow to stop continued fraud. Minnesota enforcement agencies requested stronger authority to address machines that consistently facilitated criminal activity. The committee agreed that removing kiosks altogether might deliver more direct consumer protection.

Industry Pushback and Economic Impact Concerns

Kiosk operators argued that Minnesota should strengthen regulation instead of imposing a statewide ban. They stated that kiosks serve legitimate users and align with broader digital-asset adoption across retail channels. Minnesota companies warned that a full ban would eliminate consumer access to a legal service.

Operators proposed expanded refund rules and longer transaction hold periods to reduce theft. They argued that Minnesota should target non-compliant firms rather than restrict all licensed operators. Executives also stated that fraud remained a national issue and not specifically caused by kiosk access.

Committee members responded that Minnesota faced consistent and rising losses that demanded decisive action. They emphasized that thousands of dollars left small communities each year through untraceable transfers. Minnesota lawmakers said they will refine the bill language and aim for passage before the end of the session.

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