Minnesota legislators, local law enforcement agencies, and the Department of Commerce have proposed a bill to outlaw crypto ATMs across the state due to extensive fraud and financial exploitation, particularly against the elderly. The legislation, known as Bill HF3642 and spearheaded by Rep. Erin Koegel, seeks to ban virtual currency kiosks that accept cash and debit cards, following reports of 70 fraud incidents amounting to over $540,000 in 2025.

The push for this legislation was spurred by an event where authorities discovered a bewildered senior at a gas station crypto kiosk, later revealing she was handing over half of her monthly income to con artists, endangering her housing situation. Fraudsters frequently take advantage of the elderly through deceptive identities and emotional manipulation to gain access to their pension funds or savings. The allure of cryptocurrency for scammers stems from its inherent lack of traceability, which complicates the efforts of law enforcement. Nonetheless, cryptocurrency platforms are against the ban, contending that it unfairly impacts them.

Larry Lipka from CoinFlip recognizes the problem but opposes the proposed law, arguing that current safety protocols such as transaction limits and holding periods are adequate. He asserts these mechanisms are effective, with fewer than 1% of 12,000 transactions in the past year being refundable by clients.

The Commerce Department has a different viewpoint, with Sam Smith pointing out that merely 48% of consumer grievances led to refunds, averaging only 16% of the fraud amount, suggesting a need for more legislative action. Presently, around 350 licensed crypto kiosks are functioning in Minnesota, but the bill could establish a legal precedent that may impact digital currency enterprises nationwide.