Regulators and lawmakers in the U.S. have recently banned or restricted crypto ATMs (automatic teller machines). But what triggered such reactions? According to an FBI report in 2024, there were nearly 11,000 complaints involving crypto ATMs, amounting to a whopping $246 million in alleged fraud. So far this year, 20 states have drafted or passed laws and regulations governing crypto ATMs, AARP reported.
Outright bans
Several cities in the United States have taken decisive action to ban crypto kiosks. These include Stillwater in Minnesota, Spokane in Washington and Grosse Pointe Farms in Michigan. Stillwater banned crypto kiosks after 31 fraud incidents were reported since 2023. This also includes a senior victim who lost $29,000 in an ATM scam.
Earlier in June, the Spokane City Council unanimously passed an ordinance requiring the removal of dozens of kiosks that were located in gas stations and convenience stores. In Washington, it’s an outright prohibition. Grosse Pointe Farms was more lenient by imposing transaction caps.
Daily withdrawal caps
In Michigan, one can only withdraw $1,000 per day and $5,000 over 14 days. This has been put in place even though there are ATMs that are currently operational there. At the state level, jurisdictions are increasingly imposing regulatory controls. For example, Arizona has placed a daily limit of $2,000 for new users. However, this limit extends to $10,500 for returning users after ten days. Moreover, they have also put in place a 30-day fraud refund policy.
Arkansas also has rules mandating daily caps, users have been given clear warnings, as well as made aware of user identification, and quicker refund windows. These measures came into being after the state saw losses exceeding $400,000 due to scams. Iowa and Colorado also have similar protections in place. Colorado now offers refunds for money sent across state lines. Iowa added rules for crypto ATMs and even sued big companies for helping scammers target older people.
Common law coming soon?
States such as Maine, Vermont, Nebraska, Oklahoma, Rhode Island, Illinois, and Maryland have adopted or are considering laws that standardize safeguards. Measures like daily withdrawal caps, refund mandates, licensing, transparency, and licensing requirements are becoming imperative. There’s momentum building at the federal level too. Senator Dick Durbin introduced the Crypto ATM Fraud Prevention Act, aiming to establish “common-sense guardrails.”
The victims in most of these cases are senior citizens, and with the growing number of instances of deepfakes, voice-cloning, and social engineering, regulators are forced to draw a line. AARP has backed at least a dozen bills nationwide, pushing for stronger consumer protections. While crypto proponents say these moves will stifle innovation, consumer safety is equally important.