Across the United States, a growing trend of imposing limits and outright bans on cryptocurrency ATMs is emerging, driven by increasing concerns about fraud, money laundering, and the exploitation of vulnerable individuals. These actions reflect a broader effort to bring the largely unregulated crypto kiosk industry in line with traditional financial regulations and to protect consumers from financial crimes.
Several states are taking legislative action to regulate crypto ATMs more stringently. In Wisconsin, for example, Senators introduced Senate Bill 386 on August 12, 2025, a companion to Assembly Bill 384. These bills aim to enhance the safety of crypto ATMs and shield consumers from fraudulent activities. Key provisions include mandatory licensing for operators, Know Your Customer (KYC) requirements, and daily transaction limits. Operators would be required to collect user data such as name, date of birth, phone number, address, and a government-issued ID, along with a photo, for each transaction. The proposed legislation also caps daily transactions at $1,000 per customer and limits fees to $5 or 3% of the transaction value, whichever is higher. Furthermore, the bills mandate clear fraud warnings on the machines and require operators to fully reimburse customers for fraudulent transactions reported within 30 days.
Rhode Island passed the Crypto ATM Fraud Prevention Act on August 11, which includes a $2,000 per day transaction limit for new users. Senator Victoria Gu, Chairwoman of the Rhode Island Senate Artificial Intelligence & Emerging Technologies Committee, stated that increased regulation is necessary to combat the growing use of crypto ATMs by criminals.
These state-level actions are mirrored by efforts at the federal level. Senator Dick Durbin of Illinois is advocating for nationwide reforms through the Crypto ATM Fraud Prevention Act, which seeks to establish transaction caps and user protections across the country. The U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) has also issued warnings about increasing fraud via crypto ATMs, noting a 99% increase in complaints in 2024, with losses around $247 million. FinCEN has urged financial institutions to report suspicious kiosk activity, highlighting risks related to fraud, cybercrime, and drug trafficking, with older adults being particularly vulnerable to imposter scams.
Internationally, concerns about the misuse of crypto ATMs have led to similar measures. New Zealand banned crypto ATMs in July 2025 due to concerns about their role in criminal activities, including money laundering and organized crime. Similarly, the United Kingdom has cracked down on illegal crypto ATMs, with regulators seizing machines and arresting individuals suspected of operating unregistered exchanges.
While these regulations aim to protect consumers and combat illicit activities, some critics argue that stringent KYC requirements and transaction limits could reduce access to cryptocurrency services, particularly for those who value the pseudonymous nature of digital assets. However, lawmakers and regulators maintain that these measures are necessary to build public trust and ensure the safe use of digital currencies. The ongoing debate reflects the challenge of balancing innovation with the need for robust regulatory frameworks in the rapidly evolving cryptocurrency landscape.
