Spokane Cracks Down: Crypto Kiosks Banned as ATM Scams Skyrocket

Spokane just slammed the brakes on crypto kiosks—and the timing couldn’t be more suspicious. As ATM scams surge nationwide, the city’s move feels equal parts protective and performative. Here’s the breakdown.

The Crackdown

No more digital asset dispensers on street corners. The ban targets standalone crypto ATMs, which authorities claim have become hotbeds for fraud. No numbers? No problem—just follow the trail of drained wallets.

The Irony

Banks freeze accounts daily, but sure—blame the machines. Classic case of shooting the messenger when the real villain is a financial system that still thinks checks are cutting-edge.

What’s Next?

DeFi doesn’t need kiosks anyway. This might just accelerate the shift to peer-to-peer—where the only middleman getting cut out is the one cashing in on fear.

Spokane council bans crypto kiosk over a surge in scams

According to the Federal Bureau of Investigation, Americans lost approximately $5.6 billion in cryptocurrency kiosk-related fraud in 2023. In Washington state alone, victims lost a staggering $142 million. Citing these statistics, Spokane leaders have banned the digital currency kiosks “to protect residents from becoming easy targets.”

“This ordinance will protect vulnerable Spokane residents from scams involving virtual currency kiosks, and I am proud we are the first city in the state to MOVE this legislation forward,” Council Member Paul Dillon said in a statement. Dillon co-sponsored the ordinance alongside Council President Betsy Wilkerson.

Detective Tim Schwering of the Spokane Police Department, who has investigated numerous cases tied to crypto ATM fraud, coined the term “crypto ATM fraud ” to describe the machines as tools that scammers use to exploit trust and urgency. 

“They’re scamming people, saying that they need to move their money into cryptocurrency in order to protect it. And by the time the money is into the cryptocurrency, it’s already too late,” Schwering asserted. He mentioned that recovering the funds is nearly impossible once transferred overseas.

Spokane’s new law could stop new machines from being installed and mandate the removal of all existing cryptocurrency kiosks throughout the city. According to Councilman Dillon, many of these machines are found in low-income neighborhoods, accessible to populations most at risk of financial exploitation.

“There are lots of vulnerable populations that are being preyed upon by these types of machines,” Councilman Zack Zappone said during the meeting. “So this is really making sure that we’re taking safeguards for folks in our community so that they don’t get preyed upon and lose a lot of their savings or cash in these machines.”

US states with laws against crypto kiosks

Alongside Washington’s Spokane, several US states have introduced or passed legislation to fight fraud tied to digital currency machines.

In North Dakota, lawmakers passed House Bill 1447, a legislation that WOULD impose a $2,000 daily transaction limit and require warning labels on all crypto kiosks. Additionally, the bill includes licensing and quarterly reporting requirements for businesses running such machines.

Nebraska enacted the Controllable Electronic Record Fraud Prevention Act in March. The law requires crypto ATM operators to be licensed and sets a maximum fee cap of 18%. It also enforces a $2,000 daily transaction limit for new users and mandates full refunds if fraud is reported within 90 days.

Arizona has also taken steps to regulate crypto ATM operations following an uptick in fraudulent cases. On November 13, Attorney General Kris Mayes wrote a letter asking businesses in Yavapai County to support the sheriff’s office in preventing crypto kiosk scams. 

In May, Arizona Governor Katie Hobbs signed House Bill 2387, sponsored by Rep. David Marshall of Snowflake, limiting transactions to $2,000 per day for new users, while increasing the cap for existing customers to $10,500. 

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