Spokane, Washington, has enacted one of the nation's first bans on cryptocurrency ATMs in response to surging local fraud cases, including devastating victim losses. City leaders, addressing challenges in prosecuting overseas scammers, hope to spur statewide restrictions amid similar moves elsewhere.
Detective Tim Schwering in Spokane first noted a rise in cryptocurrency crimes in 2023. 'Cases started flowing my way where people were getting ripped off by cryptocurrency machines,' he told CNBC. Funds often flowed to countries like China, Russia, and Nigeria, with recovery nearly impossible. Victims faced severe impacts, including a $900,000 theft case where two individuals died by suicide.
In June, the city council, led by Paul Dillon, banned the kiosks to prevent fraud. Dillon is optimistic the state legislature will follow suit, blocking operators from shifting machines nearby. Other areas are moving similarly: Arizona, Arkansas, and Vermont are tightening rules, while St. Paul considers a Spokane-style ban.
This builds on FBI data showing over $333 million in bitcoin ATM scam losses from January through November 2025—a clear rise—with around 45,000 machines nationwide enabling quick cash-to-crypto transfers.
Industry critic Alex Davis of Mavryk told CNBC bans could erode financial privacy: 'Eliminating them may reduce certain fraud vectors, but it also removes one of the last public-access tools for financial privacy and cash-to-crypto conversion.' He warned of a surveilled financial future.
Experts caution bans may not eliminate fraud entirely but signal growing regulatory momentum.