Minnesota bill seeks statewide ban on crypto ATMs amid surge in kiosk-linked fraud
Minnesota lawmakers are considering House File 3642, a proposal to ban crypto ATMs statewide after law-enforcement reports of growing kiosk-linked fraud targeting vulnerable residents. Representative Erin Koegel introduced the bill to the House Commerce, Finance and Policy Committee; testimony described crypto ATMs as an effective tool for scammers who coerce victims — including elderly people — into making irreversible cryptocurrency deposits (one cited case involved $80,000). The Minnesota Department of Commerce supports HF 3642 and plans a broader consumer-protection package that would incorporate the ban. Minnesota already imposed 2024 limits requiring new-user deposit caps (about $2,000) and operator refunds for scam victims, but HF 3642 would go further by outlawing the machines entirely. Around 350 licensed crypto ATMs operate in the state, run by firms such as Bitcoin Depot and CoinFlip; industry groups argue kiosks provide physical access to digital assets and call for clear, consistent regulation rather than an outright ban. Separately, Bitcoin Depot announced it will phase in ID verification for every ATM transaction citing misuse risks. For traders: this proposal could reduce on‑ramp convenience and local liquidity for retail buyers in Minnesota, raise compliance costs for operators, and signal increased regulatory scrutiny that could influence regional kiosk networks nationwide. Primary keywords: crypto ATMs, Bitcoin ATMs, HF 3642, crypto fraud, Minnesota.
Neutral
The proposal targets access infrastructure (crypto ATMs) rather than a native blockchain or token, so direct price pressure on Bitcoin (the main token used at kiosks) should be limited. A statewide ban would reduce local retail on‑ramps and might slightly lower immediate retail demand in Minnesota, but Minnesota represents a small share of global Bitcoin demand. Short-term impact: modest negative sentiment for BTC in regional markets and increased volatility for ATM operator stocks or tokens (if any). Long-term impact: neutral-to-moderately negative for kiosk-based liquidity and small retail flows; however, strengthened regulation and enhanced ID/KYC practices (e.g., Bitcoin Depot’s ID plan) could increase institutional confidence and reduce fraud, which may offset negatives. Overall, market effects are likely localized and modest, while the bigger consequence is policy precedent that could raise compliance costs industry-wide rather than materially alter Bitcoin’s market fundamentals.