How Two US States Are Fighting Back After Americans Lost $240M to Crypto ATM Scams in Six Months

An 80-year-old Florida man was in the middle of a cryptocurrency scam when police caught it happening in real time. According to ABC News, the man was depositing tens of thousands of dollars of his life savings into a Bitcoin ATM after scammers convinced him that he needed to move his money. Police intervened before the transaction could continue, potentially preventing the loss of even more money.

In Minnesota, another senior was not as fortunate. KARE 11 reported that a Maple Grove man lost $22,000 after a scammer instructed him to take his money to a Bitcoin ATM at a Minnoco gas station in Brooklyn Park. The victim followed the instructions and deposited the money into the machine before realizing he had been deceived.

Stories like these help explain why cryptocurrency ATMs have become a growing concern for law-enforcement agencies and state lawmakers. Scammers frequently use the machines to turn victims' cash into cryptocurrency that can quickly be transferred to wallets controlled by criminals.

In 2026, Indiana and Tennessee moved to prohibit cryptocurrency kiosks statewide, taking a much tougher approach than states that have focused primarily on warnings and transaction safeguards.

How Crypto ATM Scams Work

The scam often begins with a phone call, text message or email. A criminal may impersonate a bank employee, police officer, government official or technology-support representative. The victim is told that an account has been compromised, a payment is overdue, an arrest is imminent or their money is in danger.

The scammer then instructs the victim to withdraw cash and deposit it into a cryptocurrency ATM. Once the cash is converted into cryptocurrency and transferred to a wallet controlled by the scammer, recovering the money can be extremely difficult. The FBI has warned that scammers increasingly use cryptocurrency ATMs in fraud schemes and that older adults have suffered substantial losses.

Indiana Bans Cryptocurrency Kiosks

Indiana has taken a statewide approach this year. House Bill 1116, concerning virtual currency kiosks, was considered by Indiana lawmakers during the 2026 legislative session. The state's official legislative materials describe the measure as prohibiting the operation of virtual currency kiosks in Indiana.

The legislation reflects a shift from simply warning consumers about crypto-ATM fraud toward removing the machines from the state's legal marketplace. Indiana lawmakers considered the measure amid concerns about cryptocurrency kiosks being used by criminals to facilitate scams.

Tennessee Follows With a Criminal Penalty

Tennessee adopted its own statewide prohibition. Public Chapter 766 makes it a Class A misdemeanor for a virtual currency kiosk operator or another person to knowingly install, permit, place or operate a virtual currency kiosk in the state. The law took effect on 1 July 2026.

The Tennessee Department of Commerce and Insurance said state leaders had outlawed the ATM-style electronic kiosks used to facilitate cryptocurrency purchases.

The ban has also faced a federal court challenge from cryptocurrency businesses. In July, Tennessee's attorney general announced that a federal court had declined to temporarily block the law, allowing the prohibition to remain in effect while the broader legal dispute continues.

Why Older Americans Are at Risk

The Florida and Minnesota cases show how these scams can work without requiring victims to understand cryptocurrency itself. The criminals instead rely on fear, urgency, and authority. A victim may be told that their bank account has been hacked or that they must move their money immediately.

The Florida case demonstrates how quickly such a scam can unfold. The Minnesota case shows the potential financial consequences when a victim follows the scammer's instructions. In both situations, the cryptocurrency ATM becomes the mechanism through which cash is converted into digital assets and transferred away from the victim.

What Other States Could Do

Indiana and Tennessee have chosen statewide bans, while other states have considered different approaches, including transaction limits, stronger identification requirements, fraud warnings, and refund protections. The debate is likely to continue as lawmakers consider how to balance legitimate cryptocurrency use with the risks associated with fraud.

For consumers, the warning is straightforward: a legitimate bank, government agency or law-enforcement officer will not require you to withdraw cash and deposit it into a cryptocurrency ATM to protect your money. If someone gives you those instructions, stop the transaction. Independently contact the organization they claim to represent and speak with someone you trust before sending any money.