Regulatory pressure is mounting on cryptocurrency kiosks, commonly known as bitcoin ATMs, following a sharp increase in fraudulent schemes that have cost consumers hundreds of millions of dollars. According to FBI data, losses from these scams exceeded $333 million in 2025, a figure that continued to climb as the machines proliferated nationwide.
Scam Mechanics and Victim Response
Fraudsters typically impersonate law enforcement, tax authorities, or bank officials, pressuring victims via phone to resolve fabricated emergencies by depositing cash at a kiosk and transferring it to a digital wallet. Investigators in Houston report that scammers often guide victims through the process in real time, sometimes remaining on the call throughout the transaction. Forensic experts note that once crypto is sent, funds can be beyond recovery within minutes, often moving overseas.
Consumer advocates and law enforcement emphasize that legitimate agencies will never demand payment via cryptocurrency kiosks. They advise anyone receiving such a call to hang up immediately. For those already affected, recommended steps include promptly contacting the kiosk operator, filing a police report, notifying one's bank if cash was withdrawn, and submitting a complaint to the FBI's Internet Crime Complaint Center (IC3).
Legislative and Legal Landscape
In response, legislators in at least 15 states have introduced bills aiming to curb these losses. Proposed measures would require kiosk operators to register with authorities, display conspicuous risk warnings, and implement stronger anti-fraud protocols such as enhanced identity verification. Some municipal officials are considering outright bans, though critics argue this merely shifts criminal activity to other channels like wire services or gift cards.
The legal environment for operators is also tightening. For instance, the District of Columbia's attorney general sued Athena Bitcoin in September, alleging the firm failed to enforce adequate fraud protections and charged hidden fees. The suit cited company data indicating scams were linked to 93% of deposits during its initial months of operation in the District.
Groups like AARP are framing the issue as a critical consumer protection matter. Meanwhile, enforcement remains a challenge, and many victims, feeling embarrassed, may not report incidents in time for effective intervention.