Minnesota lawmakers, backed by local police and the Department of Commerce, have introduced legislation to ban crypto ATMs statewide. House File 3642, sponsored by Rep. Erin Koegel, would prohibit the operation of virtual currency kiosks that accept cash or debit cards for instant crypto purchases and repeal the relevant regulatory framework enacted in 2024. The earlier law required operators to post warnings that crypto is not legal tender and transactions are irreversible, imposed a $2,000 daily limit on new customers who had held accounts for less than 72 hours, and allowed refunds if fraud victims contacted the company and law enforcement within 14 days.
Department of Commerce officials testified that scammers routinely bypass these protections by coaching victims to use existing accounts or machines in neighboring states such as Wisconsin. The department recorded 70 complaints in the past year totaling $540,000 in losses; however, it should be noted that the vast majority of these incidents tend to go unreported. Woodbury Police Det. Lynn Lawrence described one victim on fixed income who sent roughly half her monthly earnings to scammers over six months through repeated bitcoin ATM transactions.
Sam Smith, the Commerce Department’s government relations director, told lawmakers, “Previous efforts to increase consumer protections for crypto kiosks have failed.” Larry Lipka of CoinFlip, one of the larger operators, acknowledged the problem but opposed the outright ban. “The scammers are vigilant. They’re terrible and they’re stealing from Americans,” he said, adding, “It is inappropriate to ban a legal product because fraud is happening. Not our fault.” Roughly 350 licensed crypto kiosks are said to operate in the state under eight to ten companies.
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