Heightened Scrutiny on Crypto ATMs: Law Enforcement and Legislative Actions in 2025

Crypto ATMs Under Fire: Law Enforcement and Lawmakers Take Action Against Scams

2025 has marked a pivotal year for cryptocurrency ATMs in the United States, as law enforcement agencies and lawmakers ramp up efforts to combat a surge in scams linked to these machines.

In a dramatic turn of events, some officials have resorted to using power tools to dismantle crypto ATMs, while two state attorneys general have filed lawsuits against major operators in the industry. The heightened scrutiny comes as consumer alerts are issued, particularly targeting the elderly, who have been disproportionately affected by these scams.

According to the Internet Crime Complaint Center, Americans reported a staggering $246 million in losses from crypto ATMs last year—a 99% increase from the previous year. Alarmingly, nearly 43% of these losses involved individuals aged 60 and older. The scams often involve older Americans withdrawing cash to convert into cryptocurrency, only to send it to scammers impersonating government officials or tech support workers.

One particularly creative scam emerged in Massachusetts, where residents were tricked into making crypto payments for allegedly missing jury duty. The irreversible nature of cryptocurrency transactions complicates recovery efforts for victims, as many find themselves unable to reclaim their lost funds. Legal battles have also ensued, with courts ruling in favor of crypto ATM operators, citing user agreements that place the onus on customers to ensure they own the digital wallets receiving the funds.

Chris Ryan, chief legal officer of Bitcoin Depot, expressed concern over law enforcement’s tactics, stating that breaking into their machines not only damages property but also creates additional victims. In one instance, Jasper County sheriffs cut into a Bitcoin Depot kiosk in Texas, retrieving $32,000 in cash that the company claimed rightfully belonged to them.

Calls for Regulation Intensify

As the crisis deepens, state officials are taking action. In Iowa, Attorney General Brenna Bird has filed a lawsuit against Bitcoin Depot and CoinFlip, alleging that these companies profit from scam victims while imposing “massive, hidden transaction fees.” Washington, D.C. Attorney General Brian L. Schwalb echoed these concerns in a lawsuit against Athena Bitcoin, claiming that residents were subjected to undisclosed fees as high as 26%.

In response to the growing crisis, Senator Dick Durbin (D-IL) introduced the Crypto ATM Fraud Prevention Act, which aims to impose strict transaction limits and require companies to offer refunds to fraud victims. However, the bill has stalled in the Republican-led Senate since its introduction in February.

Despite the lack of federal progress, over a dozen states have either drafted or passed regulations aimed at limiting transactions, issuing scam warnings, and implementing refund options. In June, the AARP reported that 20 states were actively working to address the issue, with Spokane, Washington, enacting a citywide ban on crypto ATMs.

Illinois has emerged as a leader in this movement, becoming the first state in the Midwest to pass legislation aimed at curbing fraud related to crypto ATMs. New regulations require operators to register with state regulators, cap transaction fees at 18%, and limit daily transactions for new users to $2,500.

A Global Perspective

As of mid-November, approximately 30,750 crypto ATMs were installed across the U.S., accounting for 78% of the global total. However, the global number of machines has remained stagnant at around 40,000 since 2022. While local governments in the U.S. are pursuing restrictions, countries like New Zealand have taken a more drastic approach, outright banning crypto ATMs to combat criminal finance.

As the debate over crypto ATMs continues, the call for “common-sense guardrails” grows louder. With the stakes higher than ever, the future of these machines hangs in the balance as lawmakers and law enforcement grapple with the challenges posed by the rapidly evolving cryptocurrency landscape.