Crypto ATM Scams Surge as Cities Consider Kiosk Bans

Reported losses from cryptocurrency ATM scams reached $388 million in 2025, a 58% increase over the previous year, prompting a wave of municipal efforts to restrict or ban the kiosks [2]. As federal regulation remains limited, local governments are increasingly treating the machines as high-risk infrastructure, with some cities moving to remove them entirely to protect residents from irreversible financial theft [1].

The rise of kiosk-based fraud

The surge in losses is driven by the unique mechanics of digital asset kiosks, which allow users to deposit cash directly into anonymous wallets [1]. Because these transactions are typically immediate and irreversible, victims—often impersonated by scammers posing as government officials or romantic partners—have little recourse once funds are transferred [1, 2]. While the FBI reported over $388 million in losses for 2025, officials believe the actual figure is significantly higher, as only a small fraction of victims report their losses to authorities [1, 2].

The demographic impact is heavily skewed toward older adults. FBI data indicates that individuals aged 60 and older filed over 6,000 complaints in 2025, accounting for more than $257 million in total losses [2]. In the Tri-Cities area of Washington, local residents have reported nearly $1 million in losses since 2023, leading the Kennewick City Council to consider an ordinance that would ban future kiosk installations and require the removal of existing machines within 180 days [1].

Regulatory patchwork and local responses

The lack of federal oversight has left the burden of regulation to state and municipal governments [1]. Spokane, Washington, became an early mover in the space, implementing a ban on crypto ATM kiosks last June [1]. According to local law enforcement, the move resulted in a dramatic decrease in reported cryptocurrency-related fraud cases within the city [1]. Other states have taken varied approaches; for instance, Arizona implemented a refund law that recovered over $171,000 for victims, while Minnesota enacted a statewide ban following nearly $1 million in reported losses [2].

Despite these local efforts, the industry continues to expand, with companies adding more machines annually [1]. While some council members argue that digital assets are legitimate components of modern savings portfolios, the prevalence of scams has forced a re-evaluation of whether convenience store kiosks serve a lawful purpose or act as a conduit for international money laundering [1].

What to watch

• Legislative momentum: Monitor whether Kennewick’s proposed ban on April 21 serves as a template for other municipalities in Washington and beyond [1].
• Federal guidance: Watch for any shift in the Commodity Futures Trading Commission’s (CFTC) advisory stance, which currently emphasizes that no legitimate institution will ever demand payment via crypto ATM [2].
• Reporting trends: Observe whether the 23% increase in complaint volume seen in 2025 continues, as regulators push for better data collection from kiosk operators [2].

The core challenge remains that while digital assets rely on decentralized systems to prevent fraud, the physical interface of the ATM has become a primary vector for exploitation. With no federal ban on the horizon, the future of these kiosks will likely be decided on a city-by-city basis.