Lawmakers in Kentucky are pushing two bills through the state legislature to regulate cryptocurrency kiosks, following scams that have cost residents millions. House Bill 380 and Senate Bill 189 aim to add consumer protections amid rising fraud involving these machines. Advocacy groups and law enforcement testified in support during a recent hearing in Frankfort.
Cryptocurrency kiosks, resembling ATMs and located in places like grocery stores and gas stations, allow users to exchange cash or card payments for digital currency transferred to a wallet. While the kiosks are not inherently fraudulent, scammers exploit their fast, irreversible transactions to move funds overseas quickly.
In 2025, Kentucky reported approximately $106 million in losses from cyber-enabled fraud, with crypto-related incidents accounting for about $60 million. The state has around 400 to 450 such kiosks, including 200 to 250 in the Louisville area encompassing Jeffersonville and New Albany.
During a Wednesday hearing on House Bill 380 in Frankfort, sponsored by Rep. Tom Smith, witnesses highlighted the risks. Navy veteran Harold Miller from Danville described a scam call impersonating a Boyle County Sheriff's Office corporal, claiming arrest warrants and demanding $15,000 via a kiosk. "They have a script that they follow through with," Miller said. "And it was a professional script."
Montgomery County Sheriff David Charles noted tracing difficulties for local agencies: "There's no way for us to trace that money as a local agency or a state agency." FBI Supervisory Special Agent William Kurtz in Louisville added that cryptocurrency complicates recovery compared to traditional banks.
AARP Kentucky's Gary Adkins, a former prosecutor, emphasized the emotional toll: "While it's a nonviolent crime, it is actually a violent crime." The group advocated for the bill, which now includes a committee substitute with daily transaction caps, criminal penalties, and mandatory identification.
CoinFlip, operating kiosks in Kentucky since 2018, supports HB 380 and uses a "Safe in Six" screening framework. Bitcoin Depot also backs reasonable protections, including ID requirements. Currently, 17 states regulate these kiosks. The FBI advises against transferring money to unknowns and recommends reporting to ic3.gov.
