Minnesota Attorney General’s Office seeks public input on cryptocurrency ATMs

A Surge in Crypto Scams Prompts Action from

In a bold move to combat the rising tide of cryptocurrency fraud, the has launched an online survey seeking public input on . These machines, popping up in everyday spots like supermarkets and gas stations, promise quick cash-to-Bitcoin conversions. But with scam losses skyrocketing, authorities are sounding the alarm.

What Are Cryptocurrency ATMs and Why Are They Everywhere?

Cryptocurrency ATMs, often called Bitcoin ATMs, are kiosks that let users insert cash and receive digital assets like Bitcoin directly in their wallets. Unlike traditional ATMs, they bridge fiat money and the blockchain world, enabling instant conversions without banks. Their numbers have exploded—from a few thousand in 2018 to over 30,000 across the U.S. today.

Proponents tout convenience for unbanked users or quick crypto access. However, high fees (up to 20%) and lax oversight make them ripe for abuse. In Minnesota, they’ve become hotspots for scammers exploiting the irreversible nature of blockchain transactions.

The Alarming Rise in Crypto ATM Scams: By the Numbers

Federal Trade Commission (FTC) data paints a grim picture. Losses from crypto ATM scams jumped from $12 million in 2020 to a staggering $250 million in just the first half of 2023. The median loss per victim? A gut-wrenching $10,000. Why so high? Transactions are pseudonymous and nearly impossible to reverse on the blockchain.

• Nationwide growth: 20x increase in reported incidents.
• Minnesota reports: Dozens of victims, many seniors.
• Scam rate: Up to 93% of deposits at some operators flagged as fraudulent.

These stats underscore a broader crypto scam epidemic, where blockchain’s transparency ironically aids tracing legitimate funds but shields criminals.

Minnesota Takes a Stand: Bans, Probes, and a Lawsuit Parallel

Attorney General Keith Ellison’s Consumer Protection Division is leading the charge with a formal investigation into crypto ATMs. Cities like St. Paul and Stillwater have outright banned them this year, citing public safety risks.

This echoes national action: The District of Columbia’s AG sued Athena Bitcoin, alleging 93% of its ATM deposits were scam-tainted. Ellison’s office has fielded numerous victim complaints, pushing for better regulations in the Wild West of crypto kiosks.

How Scammers Weaponize Crypto ATMs Against the Vulnerable

Scammers prey on fear, especially among seniors. Common tactics include:

1. Imposter scams: Fake IRS agents claim unpaid taxes, demanding immediate payment via ATM to avoid “FBI arrest.”
2. Tech support fraud: Bogus alerts lead victims to deposit cash for “refunds.”
3. Romance scams: Overseas “lovers” request funds for emergencies.

Once cash hits the ATM, it’s converted to Bitcoin and laundered through mixers or overseas exchanges—vanishing into the blockchain ether.

The Public Survey: Help Shape Crypto ATM Regulations

At the heart of this effort is a simple yet powerful tool: an online survey. Targeted at users, it probes:

• Which operators’ machines did you use?
• Did someone direct you to a crypto ATM?
• Did you lose money, and how much?
• What improvements do you suggest?

Surveys were also emailed to users of major brands. Your input could influence statewide policies, potentially curbing ATM proliferation or mandating ID checks and scam warnings.

If You’re a Victim: Steps to Take Right Now

Don’t suffer in silence. AG Ellison urges contacting:

• Local law enforcement for police reports.
• Minnesota Department of Commerce for financial probes.
• His office directly for support.

Preserve evidence: ATM receipts, wallet addresses, scam communications. While recovery is tough, reports build cases against operators and scammers.

Broader Implications for Blockchain and Crypto Adoption

This Minnesota initiative highlights a pivotal moment for crypto. Blockchain promises financial freedom, but unchecked ATMs fuel distrust. Expect ripple effects:

• Stricter regs: KYC mandates, fee caps, location limits.
• Industry response: Operators like Bitcoin Depot pushing compliance.
• Global trend: Similar probes in Canada, UK amid scam surges.

For legitimate users, this could mean safer on-ramps, boosting mainstream adoption while weeding out bad actors.

Essential Tips to Avoid Crypto ATM Scams

Stay vigilant with these pro tips:

1. Never use a crypto ATM if directed by unsolicited callers.
2. Verify taxes/officials via official channels only.
3. Use reputable exchanges like Coinbase for lower fees and better security.
4. Enable 2FA and hardware wallets for storage.
5. Report suspicious ATMs to authorities.

Knowledge is your best defense in the decentralized world.

Conclusion: Time to Act Before Losses Mount

The is more than a survey—it’s a call to safeguard innovation from exploitation. Whether you’re a crypto newbie or vet, participate in the survey and share your story. Together, we can make crypto safer, fostering blockchain’s true potential without the scam shadows.