Crypto kiosks in Minnesota spark fraud alarm
Push to ban crypto kiosks in MN amid scam surge
Minnesota lawmakers are pushing to ban crypto kiosks in the state as scams rise. FOX 9's Corin Hoggard has more.
ST. PAUL, Minn. (FOX 9) - Minnesota lawmakers are pushing to ban crypto kiosks due to fraud concerns.
Crypto kiosks fraud issues
Behind the scam:
The fake investigation into fraudulent activity on David Richter’s bank account was very convincing.
"He gave me the case ID, he gave a reference number," the Elk River retiree said of the crook he’d called in October 2024 because of a popup warning on his computer.
Scammers were sophisticated enough to assume the names of real bank employees and federal investigators.
And they needed Richter to fix the problem confidentially with cryptocurrency.
"They wanted me to take money out of my account to deposit into the kiosk machine," he said.
Who’s being targeted?:
Richter has an extensive background in financial services and fraud schemes, so he may seem like an unlikely scam target.
But once he put $4,600 in cash into a crypto kiosk, it was transferred anonymously and irreversibly.
Crypto fraudsters’ most common victims are people over the age of 60, and anyone who doesn’t know much about crypto.
"I still know very little about it, but I know to avoid it now," Richter said.
People who regularly buy and sell crypto typically don’t use the kiosks because the fees are high, and exchange rates are bad. In fact, an Iowa attorney general’s investigation found that between 95% and 98% of crypto kiosk transactions are carried out by people in the process of getting scammed.
"It’s untraceable money and so it seems like the perfect currency for criminals," said Rep. Erin Koegel, (DFL-Spring Lake Park).
Growing concerns:
Minnesota legislators passed a law two years ago requiring the kiosk owners to limit transaction amounts and refund victims in certain situations.
But police detectives say about half the cases they’re seeing go around the limits.
"Bitcoin ATMs continue to be one of the most common and damaging tools scammers are using here in Minnesota," said Det. Lynn Lawrence of the Woodbury Police Department.
How big is the problem?:
In just the first six months of 2025, the FBI found that Americans lost $240 million in crypto kiosk scams.
Minnesotans have reported millions in losses.
Taking away tools:
One of the same lawmakers behind the 2024 guardrails is now pushing for a complete ban.
Sen. Amanda Hemmingsen-Jaeger, (DFL-South Maplewood), says they can’t completely stop fraudsters, but they can make the crimes harder by taking away some of the tools.
"If we can get rid of these kiosks, these fraud machines, that's a barrier now," the senator said.
The other side:
Crypto kiosk owners say the proposed law goes too far.
"It is not the kiosk operators that are facilitating these scams," said Larry Lipka, lobbying for CoinFlip. "It is the scammers."
They’re hoping for a compromise like they got in 2024, potentially offering complete refunds for confirmed scam victims.
But police estimate only a quarter of kiosk scam victims report the crimes because they don’t know, or they’re embarrassed.
"Afterwards, I felt terrible about it because I should have known better, and I should have, red flag should have gone up sooner," Richter said.
Lesson learned:
Richter eventually got a full refund because of the 2024 law, but he’s hoping his story helps encourage lawmakers to pass the ban.
"I really can't think of a valuable purpose to have those machines available," Richter said.
Bills to ban the kiosks are bipartisan and if they pass, the machines have to disappear by the end of the year.