States Take Aim at Crypto ATM Fraud

“We just want to be sure that any customer [using] any payment, whether that’s crypto kiosks, gold or anything else, that there are good protections against fraud,” Cleveland says. 

AARP anticipates that lawmakers in nearly every state that does not already have a law will consider legislation in 2026 or 2027.

‘It’s just heartbreaking’

Lt. Eric Calendine, a fraud investigator for the Beaufort County Sheriff’s Office in South Carolina, is working this year with lawmakers in that state to pass crypto ATM legislation. Since 2024, he’s been tracking the fraud in Beaufort County and found that many cases involve jury duty, tech support, romance and impostor scams.

The money is especially hard to recover because it typically goes to overseas exchanges that don’t have to cooperate with U.S. authorities, Calendine says.

“It’s just heartbreaking,” he says. “A lot of people ... have worked their whole lives, and in a matter of an instant, it’s gone.”

In Virginia, AARP is urging state lawmakers to consider crypto ATM legislation during the 2026 legislative session.

“Legislation that establishes daily transaction limits, requires fraud warnings and ensures that operators are licensed with the state would go a long way to helping prevent Virginians from being victimized by scammers at crypto kiosks,” says Jared Calfee, AARP Virginia’s state director.

Legislation will, hopefully, include language to create a helpline or other way for local law enforcement agencies, which often don’t have experience in investigating crypto fraud, to connect with state police or attorney general’s office, says state Sen. Saddam Azlan Salim (D-Fairfax), who is leading the state’s charge on digital currency regulation.

Salim says that kiosk operators have been at the table and even supportive of most of the protections, if it means they can still have machines in the state.

Transparency, accountability

While state legislation to regulate crypto ATMs is relatively new, there are indications that such laws are helping curb the problem in California and Connecticut, the first states to pass bills in 2023.

Connecticut does not have statewide data for crypto ATM–related fraud complaints, but “we are not taking nearly as many ... cases,” says Matt Hogan, a detective with Connecticut State Police who helped draft the state’s consumer protection legislation.

While California is still seeing increases in crypto ATM–related fraud complaints, possibly because victims are reporting it more, the daily transaction limit for customers appears to be reining in the amount lost per case, according to a spokesperson for the California Department of Financial Protection and Innovation.

In Vermont, lawmakers in 2025 extended a moratorium on new crypto kiosks in the state until July 1, 2026.

Cities are also taking action. The city councils in Spokane, Washington and St. Paul, Minnesota, last year voted to ban crypto ATMs altogether.

Other municipalities, such as Omaha and Grand Island in Nebraska, have passed ordinances requiring warning signs about the fraud risks associated with using the machines. Nebraska also passed statewide legislation to regulate the machines — which AARP advocated for — in 2025.“By requiring transparency and accountability for cryptocurrency kiosks, we are taking steps to ensure that as digital finances are evolving, strong consumer safeguards are being put into place,” says Jina Ragland, AARP Nebraska’s senior associate state director for advocacy.

However, consumer protection laws won’t prevent all crypto ATM–related fraud, so enforcement is also key, says Iowa Attorney General Brenna Bird (R).

In 2025, Bird sued two kiosk operators in the state, Bitcoin Depot and CoinFlip, after her investigation found at least 95 percent of transactions at their machines were fraudulent and cost Iowans about $20 million in less than three years.

Although Iowa passed a crypto kiosk consumer protection law in 2025, which Bird calls a “strong first step,” the lawsuit alleges operators violated an older law generally prohibiting companies from defrauding or deceiving consumers.

Other attorneys general across the U.S. are launching crypto kiosk investigations, Bird notes. In September, D.C. Attorney General Brian L. Schwalb (D) announced a lawsuit against Athena Bitcoin, one of the biggest U.S. operators, after his investigation found 93 percent of its transactions were fraudulent.