Two States Push Forward Legislation to Prohibit Cryptocurrency ATMs

Key Takeaways

Table of Contents

Delaware legislators push forward proposal to eliminate cryptocurrency ATMs due to escalating fraud losses.
New Jersey follows suit with comparable prohibition legislation following increased fraud reports.
Federal Bureau of Investigation reports cryptocurrency kiosk scams resulted in losses exceeding $388 million.
Three states including Indiana, Tennessee, and Minnesota have already enacted complete prohibitions on crypto kiosks.
Industry operators dispute responsibility while regulatory scrutiny on cryptocurrency cash machines intensifies.

Legislators at the state level are taking action against cryptocurrency ATMs as Delaware and New Jersey push forward prohibition measures linked to escalating scam-related financial losses. These initiatives target kiosks that facilitate cash-to-digital asset conversions, commonly found in retail locations. The legislative efforts mirror mounting concerns across multiple states as fraudulent activity complaints continue their upward trajectory.

Delaware Pushes Comprehensive Prohibition on Cryptocurrency Kiosks

Delaware’s legislative body advanced House Bill 441 through committee review, positioning it for consideration by the full House chamber. This legislation seeks to prohibit the ownership, installation, and operation of cryptocurrency ATMs throughout the state. Additionally, it mandates existing operators dismantle their machines within a 90-day window following the law’s enactment.

The proposed legislation extends beyond physical machines to encompass cash-based cryptocurrency transactions that function similarly to kiosks. Consequently, point-of-sale systems and cashier-facilitated crypto purchases could be subject to the prohibition. This comprehensive language aims to prevent operators from circumventing the ban through alternative service models.

State Representative Cyndie Romer, who championed the legislation, connects cryptocurrency ATMs to fraudulent schemes targeting susceptible residents. She noted that legitimate cryptocurrency users seldom depend on machines charging transaction fees approaching 20%. In contrast, digital currency exchanges typically impose substantially lower fees.

New Jersey Progresses With Comparable Legislation

Lawmakers in New Jersey moved forward a parallel proposal through the Senate Commerce Committee. The committee granted unanimous approval, advancing the measure to the full Senate. This legislation would prohibit owning, managing, installing, selling, or providing Crypto ATMs.

The New Jersey legislation references a dramatic increase in fraudulent schemes connected to kiosk usage. Initial violations would carry penalties reaching $10,000. Subsequent infractions would face elevated fines of $20,000.

These legislative efforts position Delaware and New Jersey within an expanding state-level regulatory movement. Indiana enacted the nation’s first comprehensive state prohibition in March. Tennessee implemented its ban in April, with Minnesota following in May.

Fraud-Related Financial Losses Fuel Regulatory Action

Federal statistics have bolstered arguments for enhanced oversight measures. The FBI documented nearly 13,500 complaints associated with cryptocurrency ATMs in 2025. Financial losses reported during this timeframe surpassed $388 million.

These statistics reflected a 23% increase in complaints compared to 2024. They also indicated a 58% surge in documented financial losses. Over half the complaints originated from individuals aged 50 and above, with their combined losses exceeding $302 million.

Lawmakers indicate that fraudsters frequently instruct victims to deposit funds into cryptocurrency ATMs during telephone and investment scams. They contend these machines enable rapid, irreversible transfers. Consequently, state authorities now classify these kiosks as consumer protection concerns.

Industry Representatives Challenge Prohibition Efforts

The cryptocurrency kiosk industry disputes assertions that machines facilitate fraudulent activity. Operators maintain that criminals exploit payment mechanisms, emphasizing that kiosks display warning notifications. Several companies have implemented transaction caps and fraud detection systems.

Bitcoin Depot exemplifies the mounting pressure confronting the industry. The corporation previously maintained over 9,000 kiosks globally. Subsequently, it identified regulatory challenges as a primary factor contributing to its bankruptcy proceedings.

Legislators persist in favoring outright prohibitions over targeted restrictions. Multiple municipalities have explored localized regulations, while Arizona and California established transaction amount limitations. Crypto ATMs currently encounter escalating legal challenges throughout the nation.