The Days of Bitcoin ATMs in America May Be Numbered

According to the FBI, $240 million was lost to crypto ATM scams in the first six months of 2025, about double the rate of similar scams in 2024. The growing pace of crypto ATM fraud is prompting some policymakers to pursue bans and others to question why the nation is covered by these machines in the first place.

Spokane Police Detective Tim Schwering began noticing the rise in crypto crime in 2023. “Cases started coming my way where people were getting scammed by cryptocurrency machines,” Schwering said. The money would be funneled to China, Russia, Nigeria and other far-flung outposts. “You couldn’t get ahold of anyone or get the money back,” Schwering said. The savings of Spokane residents were wiped out.

Schwering said one man lost $900,000, all deposited into the dark crypto ATM on the corner. At least two people lost their savings and, discouraged, committed suicide. They tended to be elderly or lonely people surrounded by a foreign crypto-criminal posing as a romantic interest, or exploiting a decline in cognitive function that causes people to become afraid more easily, Schwering said. In some cases, the fraudsters posed as government agents threatening to exploit the full power of the IRS. But all of this would disappear if victims simply went to a crypto machine and deposited $40,000.

So the detective began visiting retirement homes and other community venues to raise awareness of the dangers posed by scammers using crypto ATMs. “My job is to try to protect people, and that’s very frustrating,” Schwering said, “especially because the criminals are usually overseas and out of reach of arrest, so we could at least change policy,” he said.

Country’s Largest Crypto ATM Ban

That’s when Spokane City Councilman Paul Dillon took a stand in favor of a statewide ban, which fizzled in the Legislature. “We wanted to see what levers we could pull at the local level,” Dillon said. As Schwering continued to investigate crypto scams, Dillon proposed an ordinance banning crypto ATMs in the city. “These compelling stories inspired us to act. There are ideological differences within our city council, but the ban passed unanimously and I am proud of it,” Dillon said.

The resolution was implemented in June and companies took advantage of a grace period to remove the machines.

Spokane’s ban was one of the first in the nation, following a similar ordinance passed in Stillwater, Minn., after a resident there was scammed. “We have not received any complaints about the removal,” Dillon said. He hopes the legislature will pass a statewide ban next session (which begins Monday), which would prevent crypto ATMs from simply being moved to neighboring municipalities.

Schwering said a federal ban — something Dillion doesn’t think is realistic given the Trump administration’s regulatory stance on crypto — is the ultimate answer, noting that the city is only 20 minutes from the Idaho border. Meanwhile, several states across the political spectrum, including Arizona, Arkansas and Vermont, are strengthening their laws or considering additional restrictions on ATMs. Other cities, like St. Paul, Minnesota, are considering outright bans similar to Spokane’s.

The problem has spread nationally, with a recent CNN report on crypto fraudsters using Circle K convenience stores across the country as a hub for this activity.

Fighting fraud or strengthening the surveillance state

Some experts – particularly those working in the crypto industry – say that removing ATMs would not eliminate fraud and that a wholesale removal could have unintended consequences.

“Eliminating them may reduce some fraud vectors, but it also removes one of the last public access tools for financial privacy and money-to-crypto conversion,” said Alex Davis, founder and CEO of Mavryk, a blockchain company focused on tokenizing real-world assets. “The question is not whether crypto ATMs should exist; but rather whether society is comfortable with a future where every dollar must pass through a fully monitored and fully authorized gatekeeper.”

Davis said crypto ATMs persist not because they are the safest option, but because they solve a problem that the regulated financial system still doesn’t solve: accessible, private and frictionless money movement. “Fraud is a real concern, but focusing solely on that ignores the broader societal dynamics. A significant portion of the population still operates in a cash-rich or underbanked economy, and for them, a crypto ATM is often the only bridge to digital assets,” Davis said.

He says the high fees – often 10% or more – are not a feature of the technology, but a premium charged for privacy and immediacy. “There is a segment of society that does not want every transaction to be monitored or intermediated,” Davis said, adding that traditional finance has increasingly moved toward restrictive guardrails, escalating compliance frictions and reduced tolerance for anonymous economic activity. “Crypto ATMs fill the void that banks no longer fill,” Davis said.

Jared Strasser, COO of The Crypto Company, a publicly traded blockchain and cryptocurrency company, said crypto ATMs serve a very narrow audience, but they exist for the same reason non-bank ATMs have always existed: they serve people who need immediate access to funds, often at a higher cost. Strasser said crypto ATMs are often the first point of contact with cryptocurrency. “Years ago in the United States, these machines served an important purpose when there weren’t many options for integrating crypto. They were one of the only simple bridges between cash and digital assets,” Strasser said.

According to Strasser, the need for crypto ATMs has declined nationally because many people holding bitcoin and other major cryptocurrencies do not use them as a cash equivalent. People who view crypto as an investment asset class are much less likely to interact with ATMs. “It doesn’t eliminate the use case for others, but it explains why these machines serve a smaller, more transactional audience,” he said, adding that it’s that same transactional nature that makes them a hub for scams.

“There is no doubt that crypto ATMs have become a magnet for fraudsters, largely due to their speed and irreversibility. However, this risk does not mean that the machines themselves do not have legitimate value,” he said, adding that the same pattern has existed for decades with electronic fraud, gift cards and traditional ATMs.

A bigger problem of unbankability

Lev Breydo, an assistant professor of law at William & Mary Law School who studies the impact of technological change on market infrastructure and financial instruments, sees crypto ATMs as a symptom of a larger problem. “The high prevalence of BTMs (Bitcoin ATMs) says a lot about America – and none of it is particularly positive. Simply put, BTMs reflect the intersection of people excluded from the mechanisms of the financial system,” Breydo said.

These customers are forced to rely on cashing checks and have generally lost confidence in traditional financial instruments, so they are turning to crypto. Breydo pointed out that the US is one of the few major markets that tolerates BTMs within a regulatory framework (others, like the UK, have largely banned them). “This regulatory clarity allowed BTMs to connect to a pre-existing U.S. ecosystem of check cashing stores, payday lenders, money transmitters and independent ATM operators,” he said.

On the demand side, the United States is a large market with a large underbanked population, a significant remittance corridor, and relatively high crypto adoption. It’s this combination that explains why the United States owns 80% of the world’s crypto ATMs. “In this sense, machines are less about ‘innovation’ than a mirror of deeper structural failures in our financial system and safety net,” Breydo said.

Strasser claims that all licensed Bitcoin ATMs in the United States are required to implement KYC (know your customer) and AML (anti-money laundering) procedures under the Bank Secrecy Act. According to Strasser, it is repression and education, not expulsion, that will ultimately be necessary to combat abuse. “While the problem of fraud is real, their value is not inherently erased by this risk; it reflects criminal exploitation of the financial rails, not the purpose of the rails themselves,” he said.

But in Spokane, Schwering will continue to shop around for businesses, and if he finds a crypto ATM, he’ll start issuing citations. For Schwering, there are too many stories and sometimes people who are scammed don’t believe they have been scammed. Family tried to intervene in the case of an elderly woman who kept sending money to a man overseas who had started an online “romance” with her. He obtained a warrant and traced the address to Nigeria. The woman’s family tried to intervene. But a year — and about $250,000 later — she was still sending money. “There’s an aspect of this where it would be too painful to believe that it’s not real and she didn’t want to believe it. Some people will continue to spend one money after another,” Schwering said.