Minnesota is one signature away from becoming the third state in the country to ban cryptocurrency kiosks, after the state legislature passed a bill targeting the ATM-like machines that law enforcement says have become magnets for fraud targeting elderly residents.
The Minnesota House passed SF 3868 by a lopsided 127-7 margin, sending it to Governor Tim Walz. The Senate had already approved it earlier. If Walz signs it, Minnesota joins Indiana and Tennessee as the only U.S. states to have outlawed crypto kiosks entirely.
Why Ban Them?
Crypto kiosks look and work a lot like ATMs. You walk up, put in cash, and the machine sends cryptocurrency to a wallet address. They're scattered across gas stations, convenience stores, and grocery stores - often in neighborhoods with older populations who may be less familiar with how crypto works.
That accessibility is the problem. Scammers use them as a near-untraceable cash-out mechanism. A fraudster will call a victim, impersonate a government agency, bank, or tech company, and direct them to deposit cash at a nearby kiosk. Because crypto transactions are irreversible and hard to trace, the money is effectively gone the moment it leaves.
The numbers in Minnesota are ugly. The state Department of Commerce reported an average loss of $6,700 per crypto kiosk scam complaint. Only 48% of victims recover any money at all - and when they do, the average refund is just 16% of what they lost. That means the typical victim who gets anything back sees less than $1,100 returned out of nearly $7,000 stolen.
Law Enforcement Led the Push
Minnesota police and prosecutors have been pushing for this ban for some time. Investigators say crypto kiosks make their jobs significantly harder - the transactions are fast, the counterparties are anonymous, and the funds cross chains before anyone can react. A traditional wire fraud case at least leaves records that can be subpoenaed. Crypto kiosks offer almost no friction for bad actors.
The 127-7 House vote reflects just how uncontroversial the bill became once legislators understood the scale of fraud. There were some concerns raised - critics argued that banning kiosks punishes the machines rather than the criminals, and that legitimate users who don't have bank accounts rely on them for financial access. But those arguments didn't pick up much traction when weighed against the documented harm to older and vulnerable residents.
Where This Fits in a Broader Regulatory Shift
The kiosk ban is part of a slow but real tightening of crypto regulation at the state level. Indiana passed a similar ban first. Tennessee followed. Now Minnesota. Other states are watching closely to see whether the political calculus makes sense for them.
There's a meaningful difference between this kind of regulation and broader federal crypto frameworks being debated in Washington. Kiosk bans are narrowly targeted - they don't touch exchanges, wallets, or the assets themselves. The argument for them is simple: these specific machines are being used primarily for fraud against some of the most vulnerable people in the country, and the cost-benefit math doesn't favor leaving them in place.
What Happens to the Machines?
If Walz signs the bill, kiosk operators would be required to shut down and remove machines from the state. There are currently several hundred crypto kiosks operating in Minnesota. The operators include both large national networks and smaller regional companies.
The industry has pushed back in other states, arguing that operators already have anti-fraud measures in place including transaction limits and fraud warnings, and that banning the machines doesn't stop the underlying scam calls. Those arguments haven't been enough to stop the legislative momentum. With a near-unanimous House vote and Senate approval already in hand, the odds of Walz refusing to sign look slim.
For crypto traders and investors, the kiosk ban has essentially no direct impact - nobody is running serious trading volume through a gas station machine. But as a signal of where state-level politics are moving on crypto consumer protection, Minnesota's lopsided vote is hard to ignore.
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Author: Blake Taylor
New York News Desk
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