The era of Bitcoin ATMs in the US may be over

According to the FBI, $240 million was lost to crypto ATM fraud in the first six months of 2025. This is approximately double the pace of similar fraud in 2024. The growing pace of crypto ATM fraud has some policymakers pursuing bans and others questioning why the country is covered in these machines in the first place.

Spokane Police Detective Tim Schwering started noticing an increase in crypto crimes in 2023. “We started seeing a cascade of cases where people were being defrauded by virtual currency machines,” Schwering said. That money will be sent to China, Russia, Nigeria and other far-flung outposts. “I couldn’t contact anyone and couldn’t get my money back,” Schwering said. The life savings of the people of Spokane were wiped out.

Schwering said one man lost $900,000, all of which was deposited into a suspicious cryptocurrency ATM on the corner. At least two people lost their savings and took their own lives in despair. Schwering said foreign crypto criminals, posing as love interests, often hooked up with elderly or lonely people, preying on cognitive decline that makes people more susceptible to fear. In some cases, scammers posed as government officials and threatened to exercise the full power of the IRS. But once the victim accesses the cryptocurrency machine and deposits $40,000, it’s all over.

So detectives began visiting nursing homes and other community facilities to educate people about the dangers posed by scammers using cryptocurrency ATMs. “My job is to try to protect people, and it’s very frustrating, especially because most of the criminals are overseas and it’s not safe to arrest them, so at least we can change the policy,” Schwering said.

Japan’s largest virtual currency ATM ban

That’s when Spokane City Councilman Paul Dillon took up the cause and first defended a statewide ban that died in Congress. “We wanted to see what levers we could pull locally,” Dillon said. As Schwering continues to investigate crypto fraud, Dillon proposed an ordinance to ban crypto ATMs in the city. “A compelling story moved us to action. Although there are ideological differences on the City Council, the ban passed unanimously and I’m proud of it,” Dillon said.

The resolution took effect in June, and companies are using the grace period to remove machines.

Spokane’s ban is one of the first in the nation, following a similar ordinance passed in Stillwater, Minnesota, after residents were defrauded. “We have not received any complaints regarding the removal,” Dillon said. He hopes the Legislature will pass a statewide ban in the next session (starting Monday) to prevent virtual currency ATMs from simply being relocated to neighboring municipalities.

Schwering noted that the city is just 20 minutes from the Idaho border, and said a federal ban (which Dillion believes is impractical given the Trump administration’s stance on crypto regulation) is the ultimate solution. Meanwhile, states across the political spectrum, including Arizona, Arkansas, and Vermont, are tightening their laws or considering additional restrictions on ATMs. Other cities, including St. Paul, Minnesota, are considering outright bans similar to Spokane’s.

This problem has spread across the country, with a recent CNN report about cryptocurrency scammers using Circle K convenience stores across the country as hubs for this operation.

Combating fraud vs. strengthening the surveillance state

Some experts, especially those working in the cryptocurrency industry, say that removing ATMs will not stop fraud, and that large-scale removals could have unintended consequences.

“While eliminating them may reduce certain fraud vectors, it also removes one of the last publicly accessible tools for financial privacy and cash-to-cryptocurrency 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 whether society will accept a future where every dollar has to pass through a fully monitored and fully authorized gatekeeper.”

Davis said crypto ATMs are here to stay not because they are the safest option, but because they solve a problem that the regulated financial system has yet to solve: accessible, private and frictionless money movement. “Fraud is a real concern, but focusing solely on it misses broader societal dynamics. A significant portion of the population still operates in cash-intensive or underbanked economies, for which crypto ATMs are often their only bridge to digital assets,” Davis said.

He said the high fees (often 10% or more) are not a feature of the technology, but a premium charged for privacy and immediacy. “There are segments of society that don’t want every transaction to be monitored or mediated,” Davis said, adding that traditional finance is moving toward increasingly restrictive guardrails, compliance frictions are increasing, and tolerance for anonymous economic activity is shrinking. “Crypto ATMs fill the void that banks are no longer servicing,” Davis said.

Jared Strasser, chief operating officer at The Crypto Company, a publicly traded blockchain and cryptocurrency company, said that while crypto ATMs serve a very limited number of users, they exist for the same reason non-bank-owned ATMs have always existed: serve people who need immediate access to funds, but often at a higher cost. Strasser said crypto ATMs are often the first touchpoint people have with cryptocurrencies. “Years ago, these machines served an important purpose at a time when there were few options for incorporating cryptocurrencies in the United States. They were one of the only simple bridges between cash and digital assets,” Strasser said.

Strasser said the need for crypto ATMs in the country is decreasing because many people who hold Bitcoin and other major cryptocurrencies are not using them in the same way as cash. People who view cryptocurrencies as an investment asset class are much less likely to interact with ATMs at all. “This doesn’t eliminate use cases for other users, but it does explain why these machines serve a more specific and more transactional audience,” he said, adding that this same transactional nature makes these machines hubs for fraud.

“There’s no question that crypto ATMs attract fraudsters, primarily due to their speed and irreversibility. But that risk doesn’t mean the machines themselves don’t have legitimate value,” he said, adding that the same pattern has existed for wire fraud, gift cards and traditional ATMs for decades.

The bigger problem of not having a bank account

Lev Blade, an assistant professor of law at William & Mary Law School who studies the impact of technological innovations on market infrastructure and financial products, sees crypto ATM machines as a symptom of a larger problem. “The high prevalence of BTMs (bitcoin teller machines) says a lot about America, none of which are particularly good. Simply put, BTMs reflect the intersection of people who are excluded from the workings of the financial system,” Blade said.

These customers are forced to rely on check cashing and generally turn to cryptocurrencies as they lose faith in mainstream financial products. Blade pointed out that the US is one of the few large markets that allows BTM within its regulatory framework (other countries, such as the UK, largely ban it). “This regulatory clarity allows BTM to integrate into the existing U.S. ecosystem of check cashers, payday lenders, money transmitters, and independent ATM operators,” he said.

On the demand side, the US is a huge market, with a significant unbanked population, large remittance routes, and relatively high cryptocurrency penetration. This combination explains why the United States owns 80 percent of the world’s cryptocurrency ATMs. “In that sense, machines are less a story of ‘innovation’ and more a mirror of deeper structural flaws in our financial system and safety net,” Blade said.

Strasser said 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. Ultimately, Strasser said, what is needed to address abuse is enforcement and education, not removal. He said: “While the fraud problem is real, the risk does not inherently eliminate its value. It is a reflection of the criminal exploitation of financial rail, not the purpose of the rail itself.”

But in Spokane, Schwering will continue to patrol businesses and begin issuing citations when he finds crypto ATMs. For Schwering, there’s so much talk that sometimes people being scammed don’t believe they’re being scammed. A family tried to intervene in the case of an elderly woman who continued to send money to a man overseas with whom she had begun an online “romance.” He obtained a warrant and located an address in Nigeria. The woman’s family attempted to intervene. But a year later, after receiving about $250,000, she was still sending money. “There was an aspect of it that was too painful to believe that this wasn’t real, and she didn’t want to believe it. Some people will continue to put good money after bad,” Schwering said.