Minnesota has officially enforced a statewide prohibition on crypto ATMs following mounting concerns over fraud linked to the machines. State authorities reported that residents have lost close to $1 million through scams involving crypto kiosks since 2023.
Governor Tim Walz approved the legislation on May 4, preventing any new crypto kiosks from being installed across the state. Machines already in operation can continue temporarily but must be removed before December 31.
State investigators say the devices have increasingly become tools for criminals targeting older adults. Fraudsters frequently pose as police officers or other government representatives, convincing victims that a family member has been arrested or faces legal trouble. The scammers then instruct the individuals to visit a nearby crypto kiosk and transfer money to secure a supposed release.
Paul Haas from the Minnesota Commerce Department noted that many people contact his office only after realizing they have been deceived. Haas added that feelings of embarrassment and panic frequently prevent people from reporting the crimes immediately, meaning the true scale of the problem is likely greater than official figures indicate.
According to state data, investigators documented 70 crypto ATM fraud cases in 2025. The incidents resulted in losses exceeding $540,000, with the average transaction costing victims roughly $6,800.
Authorities in Minnesota and other states have warned that recovering money sent through crypto ATMs is extremely difficult. Blockchain technology permanently records transactions without relying on a central authority that can cancel or retrieve transferred funds.
Traditional banking systems operate differently. Payments processed through banks or credit card companies may, in certain situations, be frozen, reversed, or disputed. Federal consumer protection laws also require financial institutions to investigate some unauthorized electronic transfers, while credit card users often have access to chargeback procedures for fraudulent purchases.
Comparable safeguards are generally unavailable for cryptocurrency transactions, although lawmakers in Congress continue to consider stronger federal oversight of the digital asset industry.
The new ban arrives as Minnesota remains under increased scrutiny over separate allegations involving misuse of taxpayer-funded programs. Federal authorities have intensified investigations into suspected fraud, drawing renewed attention to the state’s oversight practices.
The Trump administration recently announced it was freezing over $1 billion in Medicaid funding allocated to Minnesota and California while suspected fraudulent activity is reviewed.
Meanwhile, the Centers for Medicare & Medicaid Services is withholding over $200 million designated for the state as officials examine claims they described as presenting elevated fraud risks along with deficiencies in supporting documentation.
Shortly after that announcement, the Justice Department revealed that foura men from Minnesota had admitted to stealing $2.2 million from a state initiative designed to assist people experiencing homelessness. Prosecutors said the program received most of its funding through Medicaid.
Crypto industry watchers and entities like American Bitcoin Corp. (NASDAQ: ABTC) will be keeping a close eye on whether the ban on crypto ATMs in Minnesota sets the stage for similar decisions in other states around the country.
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