A bill calling for a complete statewide ban on physical cryptocurrency kiosks in Minnesota has passed its first hurdle in the state legislature. This proposal, submitted by Republican Party deputy Erin Koegel, is being evaluated in order to prevent fraud in the cryptocurrency industry.
Approach of Regulators and Public Institutions
This regulation, which may affect hundreds of cryptocurrency kiosks in Minnesota, is based on fraud cases drawn to the attention of various public institutions, especially the police and the Department of Commerce. Police officials state that especially senior citizens are targeted by malicious people through kiosks, and that after the victims unknowingly convert their money to crypto, return becomes impossible.
According to the statement made by the Minnesota Department of Commerce, 70 fraud complaints related to cryptocurrency kiosks were received in 2025 alone, and a total of over 540 thousand dollars was lost in these transactions. The ministry’s director of government relations, Sam Smith, said the current regulatory framework was not satisfactory. Smith stated that the ministry strongly supports the proposed law.
The Ministry of Commerce emphasized that the current legal framework is not effective and that the problem will be solved radically with the new law.
Content and Effect of the Bill
Approximately 350 licensed kiosks currently operate in Minnesota, and eight to ten companies offer services in this space. The draft code HF 3642 envisages completely repealing regulations such as notification obligation and daily transaction limit under the current law. In this case, all physical kiosks will have to be withdrawn from the market.
The scope of the bill is limited to physical kiosks only. Cryptocurrency platforms and digital transactions on the internet will not be affected by the regulation. The ability of people who do not have access to the banking system to use physical kiosks stands out as another element discussed in terms of the social impact of the regulation.
Impact on Other States and Sectoral Repercussions
Minnesota is not the first state to consider such a sweeping ban on cryptocurrency kiosks. However, while the regulations in this field have so far been mostly in the direction of control and restriction, the decision to completely ban may serve as a reference for other states.
Looking at the timing, it seems that an industry that is trying to regain the trust of financial institutions after the turmoil in the cryptocurrency industry in 2022 has begun to be questioned again with such prohibition decisions taken at the local level. Fraud cases, especially against the elderly, have a remarkable political impact.
The approach that companies and platforms operating in the sector will take against this bill seems to provide indicators in terms of how they evaluate user protection priorities. While the total damage from 70 statewide complaints may not be large financially, it makes an important case for regulation.
The bill’s evaluation in the committee continues and it is expected to be discussed in new sessions in the coming period.
