Minnesota’s Attorney General’s Office has launched a public comment initiative seeking citizen feedback on cryptocurrency ATMs, signaling a potential shift in how these increasingly common machines are regulated across the state. The move comes as authorities wrestle with growing concerns over crypto-related scams that have cost Minnesotans millions in recent years.
The public input period, which opened earlier this month, represents a significant step in Minnesota’s approach to cryptocurrency consumer protection. According to data from the Federal Trade Commission, cryptocurrency-related fraud losses nationwide exceeded $1.3 billion in 2024, with Minnesota residents accounting for approximately $27 million of those losses.
“We’re seeing a troubling pattern where vulnerable consumers are being directed to cryptocurrency ATMs as the final step in elaborate scams,” said Minnesota Attorney General Keith Ellison. “These machines operate with minimal oversight compared to traditional financial services, creating an environment ripe for exploitation.”
The state currently hosts over 450 cryptocurrency ATMs – a remarkable 300% increase from 2022 levels. These kiosks, typically located in convenience stores and gas stations, allow users to purchase Bitcoin and other digital currencies using cash or credit cards, often with minimal verification requirements.
My conversations with local crypto enthusiasts at last month’s Twin Cities Blockchain Summit revealed mixed reactions to potential regulation. While many acknowledged the need for consumer safeguards, concerns about innovation stifling were prevalent among the community.
“Regulation is inevitable and necessary at this point,” said Maya Rodriguez, a cryptocurrency researcher at the University of Minnesota. “The question is whether we can implement protections that address legitimate fraud concerns without cutting off access to legitimate users or hampering technological advancement.”
The public comment period comes after a series of high-profile scam cases in Minnesota. In October, Hennepin County authorities reported that several elderly residents lost their retirement savings after scammers posing as government officials directed them to withdraw cash and convert it to cryptocurrency at local ATMs.
According to CoinATMRadar, a tracking service for cryptocurrency kiosks, Minnesota ranks 17th nationally for crypto ATM density. While these machines provide convenient access to digital assets, particularly in underbanked communities, their minimal verification requirements have made them attractive tools for fraudsters.
“The typical scam involves creating a sense of urgency and fear,” explained Detective Sarah Johnson of the Financial Crimes Unit. “Victims are told they owe taxes, have warrants, or that their relatives need emergency funds. The scammers stay on the phone while victims withdraw cash, go to a crypto ATM, and send digital currency to the scammer’s wallet – making the funds virtually untraceable.”
Minnesota’s Department of Commerce has documented over 130 complaints involving cryptocurrency ATMs since 2023. Most victims report being directed to these machines by scammers impersonating government officials, utility companies, or tech support personnel.
The Attorney General’s office is considering several regulatory approaches, including enhanced warning messages, transaction limits, cooling-off periods for large purchases, and stricter operator licensing requirements. Public comments will help shape which measures advance to formal proposal stages.
Industry representatives argue that most operators already implement voluntary safeguards. “Responsible operators in Minnesota have already adopted verification protocols and warning systems,” noted James Wilson of the Digital Currency Access Association. “The challenge is distinguishing between legitimate transactions and those under duress without creating barriers that push users to less regulated channels.”
Neighboring states have taken varied approaches. Wisconsin implemented enhanced disclosure requirements in 2024, while North Dakota established a licensing framework for crypto ATM operators earlier this year. Iowa currently has minimal state-specific regulations.
“Finding the right regulatory balance is crucial,” said Professor Emily Chen, who specializes in financial technology regulation at Mitchell Hamline School of Law. “Too little oversight leaves consumers vulnerable, while excessive restrictions could push legitimate activities underground or create compliance burdens that only large operators can bear.”
The public comment period runs through February 2026, with potential regulatory proposals expected by mid-year. Minnesota residents can submit feedback through the Attorney General’s website or attend one of several scheduled public forums across the state.
For cryptocurrency users in Minnesota, this regulatory attention signals the maturing of digital asset infrastructure. As these technologies continue integrating with traditional financial systems, finding the right balance between innovation and consumer protection remains the central challenge facing regulators and industry participants alike.
