Crypto ATMs Face State Bans Over Scam Fears

Legislation to ban cryptocurrency ATMs has advanced in both Delaware and New Jersey, reflecting a growing trend among US states. Lawmakers are increasingly concerned that these kiosks are predominantly utilized for fraudulent activities.

In Delaware, House Bill 441, which proposes a ban on the ownership, installation, and operation of crypto kiosks, passed the House Economic Committee and moved to the full chamber. Similarly, the New Jersey Senate Commerce Committee unanimously voted to send its crypto ATM ban bill to the full Senate.

These actions follow similar bans enacted in Indiana, Tennessee, and Minnesota. The FBI noted nearly 13,500 complaints involving crypto ATMs in 2025, leading to over $388 million in reported losses, a substantial increase from the previous year. Over half of these complaints involved individuals over 50 years old.

Proponents of the bans argue that crypto ATMs facilitate predatory scams. Representative Cyndie Romer stated that these machines "reduce digital currency to a predatory cash grab" and highlighted that their significantly higher transaction fees (upwards of 20%) deter legitimate traders who opt for online exchanges with fees between 0.4% and 1%.

Delaware's bill also targets fiat-to-crypto sales via point-of-sale systems or cashiers, requiring existing ATMs to be removed within 90 days of the law's enactment. Violators face penalties up to $10,000, with provisions for fee refunds or contributions to a consumer protection fund. New Jersey's bill proposes penalties up to $10,000 for a first offense, doubling for subsequent offenses.

Crypto ATM operators contend they are not responsible for scams, pointing to on-screen warnings and self-imposed transaction limits. However, regulatory pressures have impacted operators, with Bitcoin Depot, a major player, filing for bankruptcy, citing these pressures.