Minnesota Bill Seeks Statewide Ban On Crypto Kiosks After Elder Fraud Rise

TLDR

• Minnesota bill HF 3642 would ban all physical crypto kiosks statewide
• State received 70 complaints totaling $540000 in reported losses
• About 350 licensed kiosks operate across Minnesota
• Nearly half of affected consumers recovered only 16 percent of losses

Minnesota lawmakers are considering a statewide ban on cryptocurrency kiosks after a rise in elder fraud cases. The proposal follows reports of seniors losing large sums through scam-linked transactions.

Rep. Erin Koegel introduced House File 3642 earlier this week. The bill would prohibit the placement or operation of virtual currency kiosks across Minnesota. The measure would also repeal parts of a 2024 law that regulates the machines.

Lawmakers cite growing fraud concerns

Koegel presented the bill before the House Commerce Finance and Policy Committee on Thursday. She said law enforcement officers described kiosks as a prime target for fraud schemes. Officers reported that scammers often direct victims to use the machines.

Woodbury Police Det. Lynn Lawrence shared details from a recent case. She said one victim on a fixed income made at least 10 bitcoin transactions over six months. The victim sent about half of her monthly income to scammers.

Lawrence said adult protection services became involved due to the victim’s financial condition. “She was already vulnerable with fixed income and food and housing insecurity,” Lawrence told lawmakers. “She was afraid she was going to have to live out of her car because she had no money left.”

State agency backs full prohibition

The Minnesota Department of Commerce voiced support for the bill. Sam Smith, the department’s government relations director, said the agency strongly supports HF 3642. He noted that previous consumer safeguards did not stop fraud cases.

The department received 70 kiosk-related complaints last year. Reported losses totaled $540,000. About 48 percent of consumers obtained refunds. The average refund equaled 16 percent of the total loss.

Minnesota has about 350 licensed kiosks. They are operated by eight to 10 companies. Smith said earlier reforms aimed to limit harm, but fraud cases continued. “Previous efforts to increase consumer protections for crypto kiosks have failed,” he said.

Existing safeguards set for repeal

In 2024, Minnesota created rules to regulate crypto kiosks. Operators must warn users that virtual currency is not legal tender. They must also disclose that transactions are irreversible and often unrecoverable.

The law set a $2,000 daily transaction limit for new customers. A new customer is defined as someone with an account less than 72 hours old. Operators must provide full refunds to new customers who report fraud within 14 days and contact law enforcement.

HF 3642 would repeal those provisions in full. The proposed ban applies only to physical kiosks. Koegel said residents could still conduct cryptocurrency transactions online.

Part of a broader policy shift

Minnesota joins other jurisdictions reviewing crypto kiosk oversight. In August, Illinois enacted the Digital Asset Kiosk Act. The law requires operator registration and live customer service. It also caps transaction fees at 18 percent.

Illinois limits daily transactions for new customers to $2,500. Other countries have also acted. In July 2025, New Zealand announced a ban on cryptocurrency ATMs. Authorities linked 157 machines to illicit fund movement.

Australia has also examined restrictions on high-risk products like crypto kiosks. Officials reported growth from 23 machines to about 2,000 over six years.

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