Crypto ATM Bans Gain Momentum in Delaware and New Jersey

Key Points

• Delaware pushes legislation forward to prohibit cryptocurrency ATMs amid fraud concerns.

• New Jersey legislature advances parallel measure targeting crypto kiosks.

• FBI reports reveal cryptocurrency ATM fraud resulted in losses exceeding $388 million.

• Three states have already enacted complete prohibitions on crypto kiosks.

• Industry representatives dispute responsibility as regulatory scrutiny intensifies.

Legislators in two East Coast states are pushing forward with measures to eliminate cryptocurrency ATMs as concerns mount over their connection to financial fraud. Delaware and New Jersey have both advanced proposals that would prohibit the kiosks converting physical currency into digital assets. The legislative actions come amid mounting evidence of escalating scam activity linked to these machines found in retail locations nationwide.

Delaware Legislation Clears Committee Hurdle

House Bill 441 has successfully passed through committee review in Delaware and now heads to the full chamber for consideration. The proposed legislation would create a comprehensive prohibition on owning, placing, and running cryptocurrency kiosks throughout the state. Under the measure’s terms, current operators would face a 90-day deadline to dismantle and remove their equipment following passage.

The legislative language extends beyond physical machines to encompass cash-based cryptocurrency transactions functioning similarly to automated kiosks. This broader scope means retail counter services and point-of-sale crypto purchases could also face restrictions. The comprehensive wording aims to close potential loopholes that might allow operators to circumvent the ban through alternative service models.

State Representative Cyndie Romer, who introduced the measure, connected these machines to predatory practices targeting at-risk populations. She noted that experienced cryptocurrency investors seldom use machines charging transaction fees approaching 20%. Digital exchange platforms typically assess substantially lower fees for comparable transactions.

Garden State Advances Parallel Legislation

Across state lines, New Jersey’s Senate Commerce Committee has moved forward with comparable legislation. The committee granted unanimous approval, advancing the bill to the full Senate for consideration. The proposal would prohibit ownership, operation, installation, sale, or provision of Crypto ATMs throughout New Jersey.

New Jersey’s legislative approach references a significant increase in fraudulent schemes connected to kiosk usage. The bill establishes financial penalties reaching $10,000 for initial infractions. Subsequent violations would trigger doubled fines of $20,000.

These initiatives position both states within a growing movement of state-level regulatory action. Indiana became the pioneer with a statewide prohibition enacted in March. Tennessee implemented similar restrictions in April, while Minnesota followed suit with its own ban in May.

Federal Data Supports Regulatory Push

Government statistics have bolstered arguments favoring enhanced oversight. According to FBI disclosures, the agency documented nearly 13,500 complaints connected to cryptocurrency kiosks throughout 2025. Financial damages reported during this timeframe surpassed $388 million.

The statistics revealed a 23% increase in complaint volume compared to 2024 figures. Simultaneously, reported financial losses jumped 58% year-over-year. Demographic analysis showed individuals above age 50 represented more than half of all complainants, accounting for losses exceeding $302 million.

Lawmakers contend that fraudsters routinely instruct victims to deposit funds into cryptocurrency kiosks during telephone scams and bogus investment opportunities. They maintain these machines facilitate rapid, essentially irreversible fund transfers. Consequently, state authorities increasingly view these kiosks as a consumer protection challenge requiring intervention.

Industry Contests Prohibition Efforts

Kiosk operators reject assertions that their machines enable fraudulent activity. Industry representatives maintain that criminals exploit various payment mechanisms, emphasizing that kiosks display prominent warning messages. Several operators have implemented transaction caps and fraud detection systems as protective measures.

Bitcoin Depot exemplifies the regulatory challenges confronting the sector. The company previously maintained a network exceeding 9,000 kiosks globally. The firm subsequently identified regulatory pressures as a significant factor contributing to its bankruptcy proceedings.

Legislative bodies increasingly favor complete prohibitions rather than limited regulatory frameworks. Municipal governments have explored localized restrictions, while Arizona and California established transaction ceiling limits. Crypto ATMs increasingly confront intensifying legal challenges throughout the nation.

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