Minnesota is pulling the plug on all virtual currency kiosks, becoming one of the first states to ban crypto ATMs statewide after fraudsters allegedly used them to steal nearly $1 million from residents over the past few years. Starting August 1, no new crypto kiosks can operate in Minnesota, and every machine must be removed by December 31.

Crypto ATMs don’t actually spit out Bitcoin

Despite the name, crypto ATMs aren’t like your neighborhood ATM. You don’t withdraw cash from them. Instead, you feed them cash or use a debit card or even a digital wallet like Apple Wallet or Google Wallet to buy cryptocurrency. Think of them as vending machines for digital coins.

Unfortunately, scammers have figured out they’re also incredibly convenient tools for making stolen money disappear.

Scammers love these machines

Here’s the scam playbook. Someone calls, texts, or messages a victim pretending to be from the government, a bank, tech support, or even law enforcement. They convince the victim there’s an urgent problem that requires immediate payment.

Then comes the twist. Instead of asking for gift cards (the old classic), they direct victims to the nearest crypto ATM. Once the victim deposits cash, it is converted into cryptocurrency almost instantly and sent to a digital wallet controlled by the scammer. At that point, recovering the money becomes incredibly difficult.

Unlike credit card payments or bank transfers, which can sometimes be frozen or disputed, crypto transactions move fast and usually can’t be reversed. It is basically the financial equivalent of hitting “Send” on a message you instantly regret, except the money is gone forever.

The numbers spooked lawmakers

Minnesota officials say they received 134 complaints involving crypto ATM scams between 2023 and 2025, with victims losing nearly $1 million. Even more concerning, about 70 of those complaints happened in 2025 alone, accounting for roughly $450,000 in losses.

As law enforcement told state lawmakers, crypto kiosks had become a “primary vehicle for financial exploitation,” particularly targeting older adults and other vulnerable people.

Minnesota had already tried regulating the machines in 2024, but officials ultimately decided tighter rules weren’t enough. So now they’re banning them outright.

Crypto itself is not being banned

Keep in mind that Minnesota isn’t outlawing cryptocurrency itself. Residents can still buy Bitcoin and other digital assets online through crypto exchanges and apps. The state is only shutting down the physical kiosks that scammers have increasingly turned into cash-to-crypto laundering stations.

This way, if you are legitimately investing in crypto, you’ll just have to do it from your phone or computer instead of the machine next to the claw game at the convenience store.

Source: The Sun