Texas Leads U.S. in $56.8M Crypto Kiosk Scam Losses; State Considers Stricter Measures

Texas residents lost roughly $56.8 million to cryptocurrency kiosks last year — more than any other state — according to FBI data presented Thursday to a Texas legislative committee. The bureau logged 1,179 complaints from Texas out of 13,460 nationwide in 2025, a year in which reported losses tied to kiosks jumped 58% to $389 million. What are these kiosks and how do the scams work? - Crypto kiosks are walk-up machines, commonly found in gas stations and convenience stores, that convert cash into cryptocurrency. Texas Tribune estimates there are about 4,000 kiosks across the state. - Scammers typically persuade victims to withdraw cash from their bank accounts and feed it into a kiosk. Once funds are converted, they often move to “unhosted” wallets and through mixers, making recovery extremely difficult. Lawmakers and experts weigh in - The House Committee on Homeland Security, Public Safety and Veterans’ Affairs heard invited testimony on foreign financial influence and quickly shifted focus to crypto kiosk fraud. - “In my career, I’ve never seen a more efficient, cleaner way to steal money,” Rep. AJ Louderback said. - Kelley Currie, an Atlantic Council fellow, told the committee that Interpol views scamming as an industry comparable to drug and human trafficking, and asserted that some gas-station kiosks “are run by Chinese money launderers.” The Justice Department has charged Chinese nationals over crypto fraud compounds in Southeast Asia and prosecuted Chinese money-laundering networks that moved scam proceeds — but DOJ has not said those groups generally operate the kiosks themselves. - Jesse Saucillo, deputy commissioner at the Texas Department of Banking, warned that recovery is “close to impossible” once funds move to unhosted wallets and mixers. He also said AI-enabled impersonation of police and state agencies has made the social-engineering calls convincing. What other states are doing - According to AARP, about 30 states have passed laws related to crypto kiosks since 2023. - Some regulatory approaches: - South Dakota caps kiosk transactions at $1,000 per day and $10,000 per month and requires full refunds for fraud victims. Wisconsin and Virginia have enacted similar transaction caps. - Maine’s regulator secured a $1.9 million settlement from Bitcoin Depot to reimburse victims. - Indiana became the first state to ban kiosks outright in March; its law allows the attorney general to sue operators and the businesses hosting the machines. Nearly 900 kiosks were operating in Indiana when the ban went into effect. Tennessee and Minnesota have since followed with bans. What’s next in Texas? - Committee chair Rep. Cole Hefner signaled Texas will consider tougher measures, suggesting the state may pursue more than regulation and hinting at an abrupt-sounding bill: “I got a pretty good idea coming down… And it’s kind of simple, but kind of abrupt.” Why it matters for crypto users and operators - The rapid rise in kiosk-related losses, the difficulty of tracing funds once they hit unhosted wallets and mixers, and increasingly convincing AI-enabled social engineering are driving an expanding patchwork of state responses — from transaction limits and restitution mandates to full bans. Texas, which tops the national list for kiosk complaints and losses, appears poised to join the states taking aggressive action.