Crypto kiosks or automatic teller machines (ATMs) are facing increasing pushback from US regulators amid concerns about fraud and crime.

Once seen as a bellwether of crypto adoption, crypto ATMs, which allow users to buy or convert crypto anonymously, are increasingly under lawmakers’ microscope. Critics and regulators have flagged numerous cases in which the machines are used to commit or facilitate illicit activity.

The Federal Bureau of Investigation (FBI) has noted an increasing amount of money related to criminal activity going through crypto ATMs. In 2024, the FBI received nearly 11,000 complaints of fraud cases at crypto kiosks, valuing over $246 million. 

Some cities have introduced outright bans on crypto ATMs, and a handful of states are beginning to introduce limits on their activities.

Stillwater, Minnesota

In mid-May, the government of the city of Stillwater, Minnesota banned crypto kiosks after a senior citizen was defrauded of over $5,000. 

Law enforcement told local media, “Someone called her and told her she had a $20,000 ‘overpayment’ to her PayPal account ... They told her to drive to her bank (Royal Credit Union in Oak Park Heights) and withdraw $20,000.”

Local police reported 31 fraud cases through crypto ATMs since 2023, with one victim, also a senior citizen, losing $29,000. The city of Stillwater has just 20,000 residents.

Stillwater police said that it has limited resources to pursue these increasingly sophisticated cases, and that a ban would be an effective measure.

Spokane, Washington

Spokane banned crypto ATMs on June 17 in response to a surge in scam activity using the machines. 

City council member Paul Dillon said, “These kiosks have become a preferred tool for scammers looking to defraud unsuspecting victims.”

The ban will not just prevent future kiosks from operating in the city but will also remove current ATM locations. 

Grosse Pointe Farms, Michigan 

A small town just outside of Detroit has also introduced limits on crypto kiosks. Grosse Pointe Farms will implement a $1,000 daily transaction cap and $5,000 aggregate limit over a 14-day period.