US Cities and States Crack Down on Crypto ATMs Over Rising Fraud
US municipalities and states are increasingly restricting crypto ATM operations in response to a surge in fraud and criminal use. Municipal bans in Stillwater, MN, and Spokane, WA, join transaction caps and licensing rules across multiple states, including Arizona, Arkansas, Colorado, Iowa, Maine, Maryland, Minnesota, North Dakota, Nebraska, Oklahoma, Rhode Island, Vermont, and Wisconsin. Common measures include daily limits of $1,000–$2,000 for new users, mandatory refunds for fraud victims, ID collection, operator registration, and prominent fraud warnings. The FBI reported nearly 11,000 crypto ATM fraud complaints worth over $246 million in 2024, with seniors heavily targeted. These regulations aim to curb illicit activity via crypto kiosks but could impede business growth for operators as compliance costs rise.
Bearish
The widespread imposition of bans, transaction caps and stricter licensing on crypto ATMs signals a regulatory headwind for kiosk operators. In past episodes—such as Europe’s 2019 AML crackdowns—tighter rules led to reduced ATM deployments and lower trading volumes. Here, nearly a dozen states and municipalities have enacted measures that increase operational costs and limit revenue per user. Short-term, traders may see reduced on-ramps and lower retail demand for crypto, possibly dampening price momentum. Long-term, if these regulations spread nationally or are adopted internationally, they could slow mainstream adoption and curb OTC volume via kiosks. However, operators who adapt to compliance may restore supply channels, stabilizing use. Overall, the net effect is bearish on crypto ATM growth and could modestly weigh on retail inflows until regulatory clarity emerges.