Minnesota Bans Crypto ATMs After Nearly $1M in Kiosk-Scam Losses

Minnesota has enacted a statewide ban on crypto ATMs after residents reported nearly $1 million in losses to kiosk-related scams. Governor Tim Walz signed Senate File 3868 on May 5, and the prohibition took effect Aug. 1, 2026. The law bars the installation, operation, maintenance or public availability of machines that exchange cash, bank credit or other virtual currency for cryptocurrency, though Minnesotans can still buy, sell and hold digital assets through lawful online services. Why the ban: scam surge and heavy losses - Minnesota’s Department of Commerce logged 134 crypto kiosk complaints from 2023–2025 with reported losses approaching $1 million. - In 2025 alone the department recorded 70 cases and more than $540,000 in losses, an average loss of nearly $6,800 per incident. Many scams involved fake family emergencies, romance fraud or criminals impersonating government or law-enforcement officials; victims were often instructed to withdraw cash, find a kiosk and scan a scammer-controlled QR code. - Commerce Commissioner Grace Arnold warned bluntly: “If someone is telling you to act quickly and send money through a kiosk … it’s a scam.” What the law requires and enforcement - All crypto kiosks had to stop processing transactions by Aug. 1, 2026. Operators have until Dec. 31, 2026 to remove machines that are visible or accessible to the public. The law targets kiosk availability first — cabinets temporarily left inside stores are less of a focus than machines that can be used. - The Minnesota Department of Commerce is working with licensed money-service businesses to secure compliance. Assistant Commissioner Sara Payne said the agency can pursue enforcement actions, including legal sanctions and civil penalties, against operators that keep kiosks active. The public and retailers are encouraged to report machines still in use. Customer protections and payouts - Operators must return any money or crypto they still hold for kiosk customers by Dec. 31, unless another lawful access method remains available. Customers can request payment in U.S. dollars at market value or a transfer to a chosen crypto wallet; wallet transfers must occur within 30 days and be recorded on-chain, with proof retained for the commerce commissioner. Discrepancies in reported losses - The FBI’s 2025 data showed 222 Minnesota complaints involving crypto kiosks with $4.07 million in adjusted losses — figures not directly comparable to the state’s because of different reporting systems and scopes. Nationwide the FBI received 13,460 kiosk-related complaints in 2025 totaling about $388.98 million in adjusted losses; more than half of complainants were over 50. A broader national trend - Minnesota joins other states tightening rules around kiosks. Tennessee banned crypto ATMs effective July 1; Indiana already prohibited them statewide; Georgia introduced transaction limits, prominent warnings and some refund requirements. Delaware and New Jersey are considering similar measures. A separate path for banks and credit unions - Minnesota is distinguishing between unstaffed kiosks and regulated financial institutions. A different law effective Aug. 1 permits banks and credit unions to offer crypto custody services under risk-management, cybersecurity and notice requirements. What’s next - The commerce department will verify whether operators have disabled kiosks, completed removals and processed required customer payouts before the year-end removal deadline. Residents who encounter operational machines can and should file complaints with the Department of Commerce. Bottom line: Minnesota’s ban is a direct response to a pattern of kiosk-targeted scams and rising losses. It removes a widely used but increasingly risky cash-to-crypto channel while keeping regulated, online and institutional crypto services available under supervision.