In a decisive legislative move, Delaware and New Jersey have advanced bills aimed at a statewide ban on cryptocurrency ATMs, citing their alarming association with a surge in scams. This action places the two states alongside Indiana, Tennessee, and Minnesota, which have already enacted similar measures.
The Delaware House Economic Committee recently passed House Bill 441, which proposes to outlaw the ownership, installation, or operation of cryptocurrency kiosks statewide. This follows the New Jersey Senate Commerce Committee's unanimous endorsement of a companion bill aimed at curbing the proliferation of crypto ATMs. Both legislative bodies express deep concerns about these kiosks, which they claim have become hotbeds for fraudulent activity.
In a troubling report released by the FBI, nearly 13,500 complaints involving crypto ATMs were logged in 2025, resulting in losses exceeding $388 million—marking a staggering 23% increase in complaints and a 58% escalation in losses compared to the previous year. Worryingly, more than half of these complaints involved individuals aged over 50, who suffered losses totaling over $302 million.
Cyndie Romer, a key sponsor of Delaware's bill, emphatically stated, "Crypto ATMs reduce digital currency to a predatory cash grab." She highlighted the exorbitant fees associated with these machines, which can reach upwards of 20% per transaction compared to a mere 0.4% to 1% charged by online exchanges. Romer urged lawmakers to protect vulnerable populations from what she described as a predatory business model.
Delaware's legislation not only seeks to ban crypto ATMs but also extends its reach to fiat-to-crypto sales via point-of-sale systems that mimic the services provided by kiosks. The bill mandates the removal of all crypto ATMs within 90 days of its enactment. Violators could face penalties of up to $10,000, and if operations continue, they would be required to reimburse users or contribute to a consumer protection fund if refunds are unattainable.
In much the same spirit, New Jersey's proposed legislation prohibits a variety of activities related to cryptocurrency ATMs, with fines starting at $10,000 for initial infractions—doubling for subsequent violations. With a keen eye on the welfare of its citizens, New Jersey legislators contend that the rise in scams tied to these kiosks necessitates robust countermeasures.
As the trend of banning crypto ATMs gains momentum across states, operators of these machines are voicing their frustrations. Bitcoin Depot, once a titan in the industry with a network of over 9,000 kiosks, attributed its recent bankruptcy filing to regulatory pressures exacerbated by accusations of facilitating scams. The firm insists that they provide comprehensive warnings and safeguards for users and cannot be held accountable for the unlawful acts of third-party scammers.
The bans targeting crypto ATMs highlight an increasingly cautious approach among U.S. lawmakers toward cryptocurrency regulation. The developments in Delaware and New Jersey signal a growing recognition of the urgent need for consumer protection in the rapidly evolving digital currency landscape.
Source: Cointelegraph
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