US State of Minnesota Shuts Down All Cryptocurrency ATMs After Scam Losses Near US$1 Million Over Three Years

The US state of Minnesota has switched off cryptocurrency ATMs after mounting scam losses convinced lawmakers that existing safeguards were no longer enough to protect consumers.

While residents can still buy, sell and hold digital assets through legal online platforms, businesses are now prohibited from offering virtual currency kiosks, ending a payment method that authorities say criminals repeatedly exploited to steal money from victims.

Governor Tim Walz signed Senate File 3868 in May after it passed the state legislature.

The law took effect on 1 August 2026, requiring all licensed crypto kiosks to stop processing transactions immediately, while operators have until 31 December 2026 to remove machines from public locations.

Crypto ATM Ban Takes Effect Across Minnesota

The new law prohibits businesses from installing, operating, maintaining or making cryptocurrency kiosks available anywhere in Minnesota.

The ban applies to machines that allow customers to exchange cash, bank credit or another digital currency for cryptocurrency.

Although kiosks can remain physically inside shops during the transition period, they must no longer be usable.

Operators are required to disable transactions from 1 August, with the final deadline for removing publicly visible or accessible machines set for 31 December 2026.

Minnesota's Department of Commerce said it is working with licensed money-service businesses to ensure operators comply with the law.

Authorities can pursue legal action, civil penalties and other enforcement measures against businesses that continue offering kiosk transactions.

Retailers and members of the public are also encouraged to report any machines that remain operational.

When lawmakers approved the measure earlier this year, Minnesota had around 350 licensed cryptocurrency kiosks operated by approximately eight to 10 companies.

Why Did Minnesota Decide To Ban Crypto Kiosks

State officials said fraud involving cryptocurrency kiosks continued to rise despite earlier regulations aimed at improving consumer protection.

Between 2023 and 2025, the Minnesota Department of Commerce received 134 complaints linked specifically to crypto kiosk scams, with reported losses approaching US$1 million.

During 2025 alone, investigators recorded 70 cases involving more than US$540,000 in losses, with victims losing an average of nearly US$6,800 per transaction.

Many of the scams involved criminals pretending to be police officers, government officials or relatives in urgent need of financial help.

Victims were often instructed to withdraw cash, visit a nearby crypto kiosk and scan a QR code controlled by the scammer, making the transfer almost impossible to recover.

Commerce Commissioner Grace Arnold warned residents:

"If someone is telling you to act quickly and send money through a kiosk … it's a scam."

Paul Haas, an investigator with Minnesota's Department of Commerce, said many victims only realise the deception after the money has disappeared.

Haas said,

"When victims call our office after a crypto kiosk scam, you can hear the panic and shame in their voices. By the time victims realize they were deceived, the emotional and financial damage can be devastating."

Officials added that many cases are never reported because victims feel embarrassed after being tricked.

Earlier Safety Rules Failed To Stop Fraud

Minnesota had already tightened regulations in 2024 by introducing licensing requirements, transaction limits, fraud warnings, disclosures and limited refund rights for some fraudulent transactions.

However, officials said organised scammers quickly adapted.

Victims were coached over the phone while completing transactions, with fraudsters telling them how to ignore warning messages and split larger payments into smaller deposits to bypass daily limits.

Authorities concluded that disclosure notices and transaction caps were no longer enough because many victims remained under intense pressure throughout the scam.

FBI Figures Show The Problem Reaches Beyond Minnesota

Federal data also highlights the wider scale of crypto ATM fraud, although it uses a different reporting method from the state's figures.

The FBI recorded 222 cryptocurrency kiosk-related complaints in Minnesota during 2025, with adjusted losses totalling US$4.07 million.

Those numbers are not directly comparable with the state's 70 reported cases because the FBI includes broader complaint categories that may involve multiple payment methods within the same scam.

Across the United States, the FBI received 13,460 crypto kiosk complaints during 2025, with adjusted losses of nearly US$389 million.

More than half of those reports involved people aged over 50.

Officials noted that cryptocurrency transfers are generally irreversible because transactions are recorded on a decentralised blockchain, unlike many traditional bank or credit card payments that may offer dispute or recovery options.

Customers Still Have Options Before Year End

The law also sets out how operators must deal with customer funds after shutting down their kiosks.

Businesses that relied solely on crypto kiosks must return any money or cryptocurrency still owed to customers by 31 December 2026, unless another lawful method remains available for customers to access those assets.

Customers may choose to receive payment in US dollars based on the market value of their cryptocurrency or request a transfer to a digital wallet of their choice.

Wallet transfers must be completed within 30 days of the request and recorded on the relevant blockchain, with operators required to keep proof for the Minnesota Commerce Commissioner.

While Minnesota has banned crypto kiosks, the state has taken a different approach towards regulated financial institutions.

Another law that also took effect on 1 August 2026 allows banks and credit unions to provide cryptocurrency custody services, provided they meet risk management, cybersecurity and customer notification requirements.