Minnesota’s Battle to Ban Crypto Kiosks: Can It Stop Scams on Seniors?

A Growing Threat at Gas Stations and Stores

Imagine an elderly person standing confused at a machine that looks just like an ATM. But instead of withdrawing cash, they are sending money to scammers. This is happening right now in Minnesota. Police are calling for a full ban on cryptocurrency kiosks to protect vulnerable people, especially seniors, from losing their life savings.

These kiosks let users buy Bitcoin or other cryptos with cash or debit cards. They sit in everyday spots like gas stations and grocery stores. Scammers trick victims into using them, and once the money turns into crypto, it vanishes fast—often to wallets overseas.

Heartbreaking Stories from the Front Lines

In Woodbury, Minnesota, police got a call about a confused senior at a kiosk. She had been scammed for eight months. In just six months, she made at least 10 Bitcoin buys. Living on a fixed income with housing worries, she gave away 50% of her money each month. Adult protection services had to step in. She feared ending up homeless.

“She was already vulnerable… She had been giving 50% of her income per month to the scammers,” said a Woodbury detective.

Another case in St. Cloud involved a 78-year-old woman who lost $80,000. Police say these crimes are hard to solve because the funds move quickly out of reach.

Faribault police report over $500,000 lost since 2022—and that’s just what victims reported. They think it’s only 25% of the total. “That’s $2 million gone from our rural community,” said one lawmaker, noting how that money could have helped locals.

How the Scams Work: A Simple Trap

1. Contact: Scammers build trust with emotional stories—like a fake grandchild in trouble or a romance gone wrong.
2. Direct to Kiosk: Victims are told to go to a nearby kiosk with cash.
3. Bypass Warnings: Scammers give a customer number and instruct to ignore on-screen alerts.
4. Instant Loss: Cash becomes crypto sent to the scammer’s wallet. It’s gone in seconds.

One victim was so controlled by the scammer that when police arrived, she doubted if they were real cops.

The Push for a Statewide Ban

Minnesota lawmakers heard these stories in a recent House committee. A bill called HF3642 wants to ban all physical statewide. Sponsored by Rep. Erin Koegel, it targets the machines but leaves online crypto buys open.

There are about 350 licensed kiosks run by 8-10 companies. Rep. John Huot compared it to banning cigarette vending machines for public safety. But Rep. Ron Kresha pushed back: “We haven’t solved smoking, so why ban kiosks?” He wants to know what companies are doing to fight scams.

The bill is on hold for now. Both parties agree on consumer protection and aim to pass something before session ends.

Why Current Rules Fall Short

Minnesota passed a 2024 law to fight crypto fraud. It requires refunds for new scam victims and caps first-time buys at $2,000. But scammers adapt fast:

• Tell victims to make many small deposits.
• Skip to kiosks in other states like Wisconsin.
• Use repeat customer tricks to dodge limits.

Last year, the state got 70 complaints totaling $540,000. Only 48% got refunds, averaging 16% of losses. “Scams are growing, and losses are emotionally devastating,” said a Commerce Department official.

The Other Side: Kiosk Operators Speak Out

Not everyone wants a ban. Larry Lipka from CoinFlip, which runs 50 kiosks in Minnesota, admits scams are bad but says kiosks aren’t the only problem. “Scammers steal from Americans everywhere,” he said.

CoinFlip pushes for tougher rules, not bans:

• Refunds for all scam victims, not just new ones.
• “Cooling off” holds on new buys for reversals.
• Revoke licenses from bad operators.

They claim success: 12,000 transactions last year, less than 1% needed refunds. “Don’t ban a legal product because of fraud,” Lipka argued.

Broader Lessons for Crypto World

This debate highlights big issues in crypto:

Crypto kiosks grew fast because they offer privacy and no bank needed. But they also enable crime. Minnesota’s fight could set a model—or spark backlash.

What Happens Next?

Expect changes soon. Lawmakers want balanced rules: maybe photo ID checks, bigger refunds, or kiosk limits in high-risk areas. For users, stay safe:

• Never buy crypto on someone’s urging.
• Verify kiosks and ignore bypass tips.
• Report scams fast to police and state regulators.

Crypto’s promise of fast, borderless money is real. But without better guards, bans like this will grow. Minnesota shows regulation must evolve with tech—and scams.

Final Thoughts

The > isn’t just local news. It’s a warning for all states. As crypto booms, protecting the vulnerable matters. Will bans work, or do we need smarter fixes? Watch this space.

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