Banning virtual currency kiosks is no solution to fraud
Opinion by Bill Repasky, attorney at Frost Brown Todd LLP.
Cryptocurrency has moved into everyday use for millions of Americans, and thousands of virtual currency kiosks (commonly called crypto or Bitcoin ATMs) now serve as convenient on‑ramps for buying and selling digital assets. As stablecoins and other products expand the market, demand for these kiosks is likely to grow.
At the same time, criminals have adapted their tactics to exploit those who use kiosks. Con artists frequently impersonate officials or trusted figures, apply pressure with urgent threats, and coax victims into converting cash at a kiosk and sending crypto directly to the scammer’s wallet — a transfer that is typically irreversible and hard to trace. In response, some cities have moved to ban kiosks outright.
Blanket bans are an overbroad and counterproductive reaction. Prohibiting kiosks punishes legitimate users and businesses, inconveniences people who rely on the service, and does nothing to eliminate the human vulnerabilities that enable fraud. When a kiosk is removed, fraudsters will simply steer victims to other payment methods.
A more effective approach is to intercept scams where they happen — at the kiosk. Operators can deploy clear, targeted warnings that explain the permanent nature of crypto transfers, remind users not to comply with callers claiming to be law enforcement or other authorities, and flag unusual or high‑risk transactions for extra scrutiny. Tailored on‑screen messages and alerts based on transaction patterns can interrupt scams in real time.
Regulators can support these measures by tying licensure or registration to mandatory fraud‑prevention protocols, encouraging consistent safety standards across operators. When rules require transparency and consumer protections, operators compete on service quality and security rather than avoiding responsibility.
Some communities have already taken proactive steps by requiring registration and prominent warnings for kiosks even before any devices appear locally. Those kinds of measured, preventative rules help educate residents and reduce harm without cutting off access to legitimate financial infrastructure.
In short, banning crypto ATMs is a blunt instrument that sacrifices access and innovation without solving the root cause of scams: human deception. The smarter path is to deploy proven prevention tools at the point of transaction and hold operators to standards that protect consumers while preserving useful services.
This article is for general information and should not be taken as legal or investment advice. The views expressed are the author’s alone.
