But a Ban Won't Stop Scammers

The Minnesota House of Representatives passed a cryptocurrency kiosk ban on April 23, 2026, by a vote of 122-12, after state officials told lawmakers that a 2024 regulatory law had failed because scammers found workarounds. The ban is embedded in HF4188, the omnibus commerce policy bill, and now moves to the Senate, where a companion bill (SF 3868) already passed 57-10 on April 9. Here's the problem: banning Bitcoin ATMs doesn't ban the scammers. The criminals who convince elderly Minnesotans to feed cash into kiosks will simply redirect those victims to gift cards, wire transfers, peer-to-peer payment apps, or out-of-state machines. Meanwhile, the ban strips legitimate users of a financial tool and shuts down lawful businesses — including the small-business hosts who earn revenue from kiosk placement — based on the actions of third-party criminals.

122-12

House Vote Margin

57-10

Senate Companion Vote (April 9)

~350

Licensed Kiosks in Minnesota

Aug. 1, 2026

Proposed Effective Date

The "2024 Law Failed" Narrative Deserves Scrutiny

Minnesota passed regulatory controls on cryptocurrency kiosks in 2024, including $2,000 daily transaction limits for new users, mandatory scam warnings, and 72-hour refund windows. State commerce officials told the House Commerce Finance and Policy Committee earlier this session that those safeguards weren't working because scammers instructed victims to use existing customer numbers, deposit cash in smaller amounts across multiple sessions, and click past every warning prompt. That narrative drove the ban. But it deserves more scrutiny than the legislature appears to have given it. The 2024 law has been in effect for barely a year. No statistical data has been publicly presented showing how many scam transactions the regulations actually prevented versus how many slipped through. We've heard anecdotal accounts of workarounds — and those are real — but "scammers found ways around it" is not the same as "regulation failed." It could equally mean the regulations were never given adequate time to produce data, or that enforcement resources weren't deployed to ensure compliance. Rep. Tim O'Driscoll (R-Sartell) acknowledged on the floor that the committee debated whether to add more regulations or institute a ban while the issue is further studied. They chose the ban. But "ban while we study it" is a contradictory framework — once 350 machines are decommissioned and 8-10 operators exit the state, that infrastructure doesn't come back when the studying is done.

"This is the newest method of scamming. 'Grandma, I need you to go down to the blank blank store and go to the crypto machine and I need you to put money in and I need you to put this code in to be able to wire that money to me so that I can get home.' It is a scam."

Supporting source image for https://www.house.mn.gov/sessiondaily/story/19119. — https://www.house.mn.gov/sessiondaily/Story/19119 Source: house.mn.gov

— Rep. Tim O'Driscoll (R-Sartell), on the House Floor

O'Driscoll is right about the scam pattern. He's right that people older than 65 are disproportionately targeted and that they underreport because of shame. The money lost affects their food, medications, and housing. None of that is in dispute. What's in dispute is whether banning the machine fixes the problem — or just moves it.

The Bill's Author Admitted She Doesn't Understand Bitcoin

This is the part of the Minnesota story that has been quietly omitted from the post-vote coverage: the legislator who authored the prohibition does not, by her own admission, understand the technology she has voted to ban. Rep. Erin Koegel (DFL-Spring Lake Park) — co-chair of the House Commerce Finance and Policy Committee and the original sponsor of HF 3642, the predecessor measure whose ban language was rolled into HF 4188 — openly acknowledged during the February 26, 2026 committee hearing that she does not fully understand how Bitcoin works. The person leading the charge to prohibit a financial product in the State of Minnesota stated, on the record, that she does not understand the product she is prohibiting. The framing made the admission worse. Koegel opened the hearing by asking participants to engage in "good faith," and closed it by thanking everyone for the "good-faith dialogue." Yet bringing a prohibition bill before a committee — not a regulation bill, not a tightening of existing law, but an outright ban — without first investing the effort to understand the basic mechanics of the product is the opposite of good faith. The hearing is on the record on YouTube; the admission is in her own words. She was not alone in the misunderstanding. During the same proceedings, another committee member asserted that "Bitcoin is the opposite of transparent." This statement is the precise inversion of reality. Bitcoin operates on a global public ledger. Every transaction is permanently recorded and visible to anyone in the world. Wallet balances are public. Transaction flows are traceable. Blockchain analytics firms — Chainalysis, Elliptic, TRM Labs — have built entire businesses on Bitcoin's radical transparency, and the FBI, FinCEN, and international law enforcement use those tools daily to identify wallets, trace stolen funds, and quantify exactly the losses the Minnesota legislators cited as their reason for the ban. The very statistics driving the bill exist because blockchain transactions are traceable in a way cash, wires, gift cards, and payment apps are not. That legislators are writing a prohibition based on a fundamental misunderstanding of the product they are prohibiting is not a partisan observation. It is a procedural one. The 122-12 House vote and the 57-10 Senate vote rest on a foundation that the bill's own sponsor acknowledged she did not understand. Our full reporting on the February 26 hearing walks through what was said, by whom, and what was demonstrably wrong about it.

Bitcoin ATM Fees Reflect Real Operating Costs

Rep. Erin Koegel (DFL-Spring Lake Park) told the House that cryptocurrency kiosks "charge high fees and lack transparency." This framing — repeated frequently in the national debate — deserves a factual correction. Bitcoin ATMs exist in a highly competitive market with dozens of operators who compete in part on price. The fees consumers pay reflect real operating costs: cash logistics (armored car services, vault storage, cash insurance), retail rent for kiosk placement, the machines themselves (which cost $5,000-$15,000 each), FinCEN compliance programs, state licensing, KYC/AML software, and customer support. These are physical cash-handling businesses with regulatory overhead at every level. Other self-service kiosk businesses — currency exchange kiosks at airports, check-cashing stores, prepaid debit card reload stations — charge comparable or higher markups. A 15-20% fee on a small-value cash transaction that must be processed, compliance-checked, and converted to a digital asset in real time is not inherently predatory. It's the cost of offering an instant, walk-in financial service in a convenience store. That doesn't excuse operators who engage in drip pricing or hide their true fees — practices that multiple attorneys general have actively litigated. Fee transparency is a legitimate regulatory target. But "high fees" as a standalone justification for a ban conflates a pricing complaint with a consumer protection crisis.

A Ban Doesn't Reduce Harm — It Redistributes It onto Minnesotans

The empirical case against prohibition has now been laid out by operators in multiple states. The clearest articulation came in the operations report filed this month with the Hawaii Legislature on a parallel kiosk-ban bill (HB 1642 CD1), which measured a 1.13% scam share of volume against the bill's claimed 90%, and walked through what a prohibition actually accomplishes when measured against the goals its supporters cite. The same logic applies to Minnesota. Measured against the outcomes legislators say they want, here is what banning Bitcoin ATMs actually does in Minnesota:

Reduce fraud losses? No. The social-engineering scams driving the losses pre-date Bitcoin ATMs and migrate freely between payment rails — gift cards, wire transfers, peer-to-peer payment apps, money mules, prepaid cards. Closing one rail moves the loss; it does not erase it. AARP itself has acknowledged that gift cards, wires, and payment apps were the preferred scam-payment methods before scrutiny pushed scammers toward crypto kiosks. When Minnesota closes the kiosk channel on August 1, 2026, the same scammers will be on the phone with the same victims — pointing them at the next channel.

Protect victims? No. With kiosks banned, scam victims will be redirected by the same callers to meet strangers from Craigslist, Telegram, and LocalBitcoins-style forums to hand over cash in parking lots — without cameras, receipts, blockchain anchoring, transaction limits, KYC, operator hotlines, or compliance-driven holds. Every consumer-protection feature the regulated channel provides disappears. The victim who was previously talked into feeding $5,000 into a Holiday Stationstore kiosk under store cameras will instead be talked into handing $5,000 in cash to a stranger in a parking lot, with no record of the meeting and no recourse afterward.

Help law enforcement? The opposite. Licensed kiosk operators are FinCEN-registered Money Services Businesses. They file Suspicious Activity Reports, retain video footage, log destination wallet addresses, respond to subpoenas, and in many cases proactively notify local police of fraud patterns. Peer-to-peer cash sellers do none of that. Banning kiosks blinds Minnesota investigators to the very transactions they want to trace, and forecloses the operator-to-agency cooperation that already happens routinely between licensed operators and the Minneapolis Police Department, the Saint Paul Police Department, the Minnesota BCA, and federal authorities.

Lower consumer cost? No. Cutting the supply of regulated kiosks does not eliminate cash-to-bitcoin demand — it concentrates that demand on unlicensed peer-to-peer sellers, who charge higher premiums than licensed kiosks, with no fee disclosure, no receipt, no recourse, and no protection if the seller disappears with the cash. Banning the regulated channel hands the unregulated one a captive Minnesota market.

Improve public safety? No. In-person cash-for-bitcoin meetups have a long, documented history of robberies, assaults, and homicides — exactly the harms a regulated, well-lit, camera-monitored kiosk inside a Cub Foods or a Holiday station is designed to prevent. Pushing cash transactions out of retail interiors and into private meetings makes Minnesotans less safe, not more.

Cash-to-bitcoin demand is not shrinking. Bitcoin's adoption curve continues to rise across the United States, household ownership has grown year over year, and cash remains the preferred payment method for tens of millions of Americans — particularly among the unbanked, underbanked, immigrant, tribal, remittance-sending, and elderly populations the bill says it wants to protect. Minnesotans who prefer cash, who lack a bank account, who do not want to link a bank to a crypto exchange, who send money to family abroad, or who simply do not trust online platforms will not stop wanting bitcoin because the Legislature said so. They will buy it from someone.

The choice HF 4188 actually presents is not between "Bitcoin ATMs" and "no Bitcoin ATMs." It is between a regulated, KYC-bound, FinCEN-supervised counterparty and an unregulated one — and HF 4188, as written, eliminates the first while leaving the second untouched. The unintended consequence of the bill is to harm the very Minnesotans it claims to protect.

That is also why the existing-law objection is the strongest one against the bill.

Minnesota Already Has a Successful Kiosk Consumer-Protection Statute — With Operator Refund Liability

This is the most consequential point in the entire record on HF 4188 and SF 3868: Minnesota does not need a new law. Minnesota already enacted a comprehensive cryptocurrency-kiosk consumer-protection statute in 2024 that places operator refund liability on the kiosk operator — not on the victim, not on the State, not on law enforcement. That statute is in force today. It is the legal architecture that has been quietly producing the outcomes the Legislature now says it wants.

Operator refund liability is already the law in Minnesota. Minnesota's existing virtual-currency-kiosk statute already imposes mandatory refund liability on the operator when a customer is the victim of a scam. The operator — not the State, not the victim — bears the cost of making the customer whole. This is the operative legal mechanism that turns scam attempts into recoveries before the funds leave the operator's control. It is the reason compliant Minnesota operators are already producing $0-loss outcomes on the very scam patterns the bill cites as the reason for prohibition. Source: Minnesota's 2024 cryptocurrency-kiosk consumer-protection law, codified in Minnesota Statutes chapter 53B (operator licensing, refund liability, fee and rate disclosure, transaction limits for new customers, daily transaction caps, and a designated compliance contact).

The 2024 statute also covers fee disclosure, transaction caps, licensure, and Commerce oversight. The same statute requires operators to disclose all fees and the applicable kiosk rate before the transaction is completed, requires daily and lifetime caps for new customers, requires the operator to maintain transaction records, requires a designated compliance officer, and authorizes the Department of Commerce to examine, license, and discipline operators. Every protective measure the bill's findings cite as a reason for prohibition is already a statutory requirement on Minnesota operators today.

The outcome the bill says it wants is the outcome the existing law is already producing. When operator refund liability is enforced, scam attempts get caught at the compliance hold, the funds get refunded before they leave the operator's wallet, and the customer is made whole. That outcome is what the existing Minnesota statute was designed to produce — and it is what compliant operators are producing today.

HF 4188 and SF 3868 do not strengthen this regime. They eliminate the operators on whom the refund liability falls. Banning the regulated channel does not transfer that refund liability to a peer-to-peer cash-for-bitcoin seller in a parking lot — that liability simply ceases to exist, along with the licensure, recordkeeping, fee disclosure, and Commerce oversight that depend on a licensed counterparty. The law the Legislature passed in 2024 is the law that protects Minnesotans. The law it is about to pass in 2026 destroys the framework that makes the 2024 law work.

Other Existing Minnesota and Federal Authorities

On top of the operator-specific refund-liability statute above, Minnesota and the federal government already provide broad authority to act against bad operators and protect victims. HF 4188 / SF 3868 is duplicative in every other dimension as well.

Minnesota's consumer-protection statutes. The Minnesota Consumer Fraud Act (Minn. Stat. § 325F.68–.70), the Prevention of Consumer Fraud Act, and the Uniform Deceptive Trade Practices Act (Minn. Stat. § 325D.43–.48) give the Attorney General's office authority to investigate any operator engaged in deceptive practices, sue for restitution, impose civil penalties, and obtain injunctive relief. This is the same statutory authority Iowa's Attorney General used to sue Bitcoin Depot and CoinFlip — proof that prohibition is not needed to address the harms the bill identifies.

Minnesota's elder-protection statutes. Minnesota's elder-abuse and financial-exploitation statutes (Minn. Stat. § 626.5572 mandatory reporting; § 609.2335 financial exploitation of vulnerable adults) specifically protect elderly Minnesotans from financial abuse, with criminal penalties, civil remedies, and Adult Protective Services intervention authority. Targeting bad actors who exploit the elderly residents the bill cites most often does not require a new statute — Minnesota already has the criminal and civil tools to prosecute it.

Federal regulation already in force. Every cryptocurrency-kiosk operator in Minnesota is a FinCEN-registered Money Services Business subject to the Bank Secrecy Act, Suspicious Activity Report obligations, Customer Identification Program requirements, and federal AML examinations. The Federal Trade Commission has broad authority over deceptive financial-services practices, and federal wire-fraud, mail-fraud, and elder-justice statutes apply with full force regardless of state action.

The Iowa and District of Columbia cases the Minnesota Legislature has cited as evidence of the industry's failures were both brought under existing consumer-protection law — not a prohibition statute. They are the proof that targeted enforcement works.

Targeted enforcement against specific bad operators — under the existing virtual-currency-kiosk statute, the Minnesota Consumer Fraud Act, and federal AML obligations — is consumer protection. Industry-wide prohibition built on enforcement-funnel statistics, layered on top of an existing statute that already imposes operator refund liability, signed off by a sponsor who admitted she did not understand the technology, is something else.

What Would Actually Work Better Than a Ban

Minnesota's legislature faced a real problem and chose the bluntest possible instrument. There are smarter alternatives — approaches that protect vulnerable consumers without eliminating a legitimate financial product for everyone else.

Policy alternatives that target scams without banning the machines:

Enhanced new-customer onboarding protocols: The highest-risk period for scam transactions is when a new customer makes their first high-value deposit. Operators should be required to implement escalating verification — including live human interaction (phone or video call) — for first-time users attempting transactions above a threshold (e.g., $500)
Mandatory cooling-off periods for high-value transactions: Require a 24-48 hour delay for any single transaction above $1,000, with the option for the customer to cancel during that window. This directly counters the urgency scammers rely on
Real-time scam intervention technology: Require operators to deploy AI-driven behavioral analysis that flags patterns consistent with coached transactions (rapid button-pressing past warnings, multiple deposits in one session, amounts just below limits) and triggers a mandatory pause with live agent verification
Operator accountability with teeth: Instead of banning machines, make operators financially liable for scam transactions where the operator failed to follow enhanced protocols. This creates a direct economic incentive for operators to invest in prevention
Cross-kiosk transaction monitoring: Require operators to share transaction data with a state-administered system that flags when the same customer (or the same kiosk) is seeing unusual activity patterns across multiple sessions
Age-specific protections: Since seniors are disproportionately targeted, require enhanced verification — including a mandatory phone call to a designated contact person — for any customer over 60 attempting a transaction above $500

South Dakota's approach with SB 98 demonstrates that detailed, specific regulation is possible. Whether it's effective remains to be seen — it's new — but at least it attempts to solve the actual problem rather than eliminating the product category entirely. The industry bears significant responsibility here. Operators who failed to invest in meaningful fraud prevention — not just compliance checkboxes, but actual scam interdiction — created the political environment that makes bans viable. When attorneys general across the country allege that 80-98% of high-value transactions at certain operators are scam-related, legislators understandably lose patience with self-regulation. But the solution isn't collective punishment for an entire product category. It's holding specific operators accountable for specific failures while raising the compliance floor for everyone.

Bipartisan Support, Limited Dissent

The 122-12 margin reflects genuine bipartisan consensus. Both DFL and Republican members spoke in favor of the ban. Rep. Drew Roach (R-Farmington) offered the most substantive opposition, arguing that there are ways to regulate kiosks — such as disabling cash input — that would allow small businesses to continue operating machines and let cryptocurrency holders cash out their digital wallets. That compromise did not prevail, but it points to a middle path the legislature apparently didn't explore in depth. The kiosk industry itself opposes the ban, arguing that operators are not the ones conducting scams and should not be shut down for the actions of third-party fraudsters. That argument, while legally sound, has failed politically in every state where it's been tested — because it doesn't come with a credible alternative plan that demonstrably reduces fraud.

The National Regulatory Picture

Minnesota's action fits into an accelerating national pattern. Indiana enacted the first outright ban through an emergency declaration in March 2026. Tennessee's legislature passed a ban with Governor Lee signing it on April 23, 2026. More than 25 states have enacted some form of regulatory protection for cryptocurrency kiosk users. At the federal level, a U.S. senator recently suggested that a market structure bill could address crypto ATM scams. Internationally, Australia's financial watchdog is seeking authority to ban cryptocurrency kiosks entirely. The enforcement actions driving these legislative decisions continue to intensify:

State-level enforcement actions fueling the ban movement:

The DC Attorney General sued Athena Bitcoin on April 23, 2026, alleging 93% of deposits were scam-related
The Massachusetts AG sued Bitcoin Depot on February 3, 2025, alleging more than 80% of customers depositing $10,000+ were scam victims
The Iowa AG sued both Bitcoin Depot and CoinFlip, alleging 50-98% of in-state transactions were fraudulent
The Missouri AG issued civil investigative demands in December 2024 to five operators simultaneously: Bitcoin Depot, RockItCoin, CoinFlip, Athena Bitcoin, and Byte Federal

The FTC reported that cryptocurrency ATM fraud losses exceeded $333 million in 2025, up from $12 million in 2020. The FBI's 2024 data showed seniors losing $2.8 billion to cryptocurrency scams broadly, at a median loss of $83,000 per victim. These numbers are driving legislative urgency — but they also reflect the failure of specific operators, not the inherent unfixability of the product.

What Happens Next in Minnesota

The House bill (HF4188) and the Senate companion (SF 3868) are not identical, which means they may require a conference committee to reconcile differences before reaching the governor's desk. But the lopsided margins in both chambers suggest strong legislative consensus. The cryptocurrency kiosk ban is one piece of the broader omnibus commerce bill, which also includes student loan servicer transfer standards, insurance lead generator recordkeeping requirements, and unclaimed property statute amendments. Packaging the ban into an omnibus bill makes a line-item veto less likely but doesn't eliminate it.

What This Means for Minnesota Consumers

If you use Bitcoin ATMs in Minnesota:

Chart summarizing key sourced metrics. — Key sourced metrics. Visualize the strongest filing metrics as a simple chart. Source: Bitcoin ATM News reporting

Kiosks remain legal and operational until August 1, 2026, assuming the bill is signed into law
If you hold cryptocurrency purchased through a kiosk, your holdings are not affected by the ban — you still own whatever Bitcoin you've bought
Operators have until December 31, 2026 to process final payouts for any outstanding transactions
If you rely on Bitcoin ATMs as a financial tool — whether for remittances, purchasing cryptocurrency, or cashing out holdings — contact your state legislator now. The conference committee process is your last opportunity to advocate for regulation over prohibition
If you or someone you know has been scammed at a cryptocurrency kiosk, report it to local law enforcement and the Minnesota Attorney General's office
Review our consumer protection resources for guidance on recognizing and responding to Bitcoin ATM scams

If this ban takes effect, Minnesotans who currently use Bitcoin ATMs for legitimate purposes — and the overwhelming majority of transactions are small-value, legitimate purchases — will lose access. The scammers will move to the next channel.

What This Means for Operators

For the 8-10 companies operating approximately 350 licensed kiosks in Minnesota, the immediate question is whether the conference committee creates any opening. Given 122-12 and 57-10 margins, operators shouldn't count on it. But the larger lesson extends beyond Minnesota. The industry's argument that "we're not the scammers" has now been rejected by overwhelming bipartisan margins in multiple state legislatures. That argument fails because it's defensive — it doesn't offer legislators a credible alternative that demonstrably reduces fraud.

What operators should do — in Minnesota and nationally:

Engage Minnesota legislators directly during the conference committee process with specific, data-backed proposals for enhanced regulation — not generic talking points about innovation
Invest in smart compliance programs that focus on the highest-risk moment: new customer onboarding. Live human verification for first-time high-value transactions would dramatically reduce scam completion rates
Publish fraud prevention data. If your compliance programs are working, prove it. Operators who can show measurable scam interdiction rates — not just compliance paperwork — give legislators a reason to choose regulation over prohibition
Support industry-wide standards rather than individual operator lobbying. A collective commitment to verifiable fraud reduction benchmarks is more politically credible than company-by-company advocacy
Educate legislators on what a ban actually does: it eliminates a regulated, KYC-compliant channel and pushes activity into unregulated peer-to-peer platforms and out-of-state machines where there are no consumer protections at all

The operators who survive the current regulatory wave will be the ones who can prove — with data, not press releases — that their machines are not scam pipelines. The operators who can't prove that will find that more states follow Minnesota's lead. Review your compliance posture on our operators directory and consider whether your fraud prevention measures would withstand the scrutiny that Massachusetts, Iowa, and DC have applied to your competitors. Minnesota's 2024 law didn't get a fair trial. But the industry also didn't make the case that it was working. Both failures led to this vote. The conference committee may be the last chance to demonstrate that smart regulation — not prohibition — is the answer. If the industry can't make that case in Minnesota, it will face this same vote in a dozen more statehouses by 2027.

Minnesota House Votes 122-12 to Ban Bitcoin ATMs — But a Ban Won't Stop Scammers