A Minnesota lawmaker has introduced a bill that could ban virtual currency shops statewide after reports of incidents involving crypto-related scams.
At Thursday’s hearing of the Minnesota House Finance and Business Policy Committee, Representative Erin Koegel said the bill, House File 3642, would address the “new” and “minimally regulated” technology of cryptographic kiosks.
Kogel said he heard from state law enforcement that many scammers were using the shops to trick residents into sending crypto, while legitimate traders tended to use centralized exchanges.
“Due to the nature of cryptocurrency, these fraudulent transactions are often irreversible and extremely difficult to trace,” Kogel said, adding:
“This bill allows us to work across party lines to protect the people of Minnesota from irreversible financial crimes.”
The Minnesota government has already passed a law in 2024 that will try to combat fraudsters using the state’s virtual currency shops. The law set a $2,000 deposit limit for new store users and required companies to provide full refunds to victims of fraud. However, Kogel’s bill, if passed, could ban the technology entirely in Minnesota.
“Over the last two years, we’ve definitely identified problems with these Bitcoin ATMs, particularly in our jurisdiction,” Sergeant Jake Lanz of the St. Cloud Police Department said at Thursday’s committee meeting. “(…) also interesting to us is that it is definitely a target for our aging population.”
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According to the Minnesota Chamber of Commerce, there are about 350 licensed crypto shops operated by several companies, including Bitcoin Depot and Coinflip. The American Association of Retired Persons reported in February that 17 states have laws on the books requiring crypto ATM operators to implement fraud protections, such as setting daily transaction limits and requiring fraud warning signs.
Bitcoin ATM operator to require ID for all transactions
On Tuesday, Bitcoin Depot, one of the largest crypto-ATM operators in the US, announced that it will implement a policy that requires ID verification for users with every transaction at one of its machines. The phased rollout, which began in February, was in response to “potential abuse,” though the company didn’t specifically mention fighting fraudsters at the state level.
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