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AARP Pushes States to Crack Down on Crypto ATMs

New laws in Vermont, Minnesota aim to protect against fraud

spinner image a bright yellow bitcoin kiosk in a shopping mall
Bitcoin Kiosk machine at Pioneer Place, shopping mall, in downtown Portland, Oregon.
Alamy Stock Photo

Criminals increasingly use cryptocurrency ATMs in schemes to steal people’s money, but some states have passed laws to regulate the machines and safeguard consumers.

Last month, governors in Minnesota and Vermont enacted AARP-backed legislation to strengthen regulation of these machines, also known as cryptocurrency kiosks or bitcoin ATMs, to prevent fraud. AARP is working to pass similar legislation in Rhode Island, and we are ramping up to advocate for tighter crypto ATM oversight in additional states in the coming year.

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“Crypto ATMs are favored by criminals for their anonymity and general lack of oversight,” said Greg Marchildon, state director for AARP Vermont. “Vermont is taking a step in the right direction by requiring registration and regulation of these kiosks.”

Crypto ATMs look and operate like banks’ automatic teller machines, but they’re not connected to any bank. They can be found in grocery markets, convenience stores, gas stations, restaurants and other spots across the U.S.

The machines are used for legitimate purposes to convert dollars into digital currency. But criminals rely on them as a fast, easy and often untraceable way to get access to victims’ cash.

Vermont’s bill, which Gov. Phil Scott signed into law on May 20, requires cryptocurrency kiosk operators to register in the state, sets a daily transaction limit of $1,000 and regulates fees, among other measures. It prohibits the installation of new crypto kiosks until July 1, 2025.

Under Minnesota’s legislation, which Gov. Tim Walz signed into law on May 20, new ATM users can get a refund for losses due to fraud if they report it within 14 days of the transaction. Transactions for new customers are limited to $2,000 a day, and kiosk operators must post warnings about potential fraud.

Crypto ATMs mostly unregulated

Cryptocurrency kiosks have multiplied across the country in a short time, leaving many states wrestling with how best to regulate them, said Francoise Cleveland, an AARP government affairs director for financial security. Though some states require kiosk operators to be registered, most do not.

“The problem is people just don’t quite understand cryptocurrency,” Cleveland said. “I think there’s an appetite among states to do something, but they just don’t understand what to do. And so with this legislation, we’re trying to help the states get a handle on the fraud that’s being perpetrated through these kiosks.”

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The Federal Reserve says crypto ATMs were used for at least $35 million in fraudulent transactions in 2022. Often, a criminal will instruct their victim to withdraw cash from their own bank and deposit it into a crypto ATM to buy virtual currency, according to Amy Nofziger, director of fraud victim support for AARP Fraud Watch Network. The money is then sent to the scammer’s digital wallet, usually irreversibly.

AARP Fraud Watch Network has shared devastating stories of victims who emptied their bank accounts into these machines, Cleveland noted.

Daily transaction limits, such as those passed in Vermont and Minnesota, can mean the difference between someone losing $2,000 or their life savings, she said. “We’re trying to keep that as low as possible so that people aren’t feeding all of their money into a machine and never seeing it again.”

AARP has a long history of fighting fraud that targets older Americans and educating them on how to protect themselves. AARP Fraud Watch Network can help people learn to spot and stop scams and know what to do if they become a victim.

Read more about scams and fraud, and keep up with our state advocacy work.

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