Washington legislators' push for stricter rules on cryptocurrency kiosks ended without passage this session. Senate Bill 5280 sought to curb fraud linked to these machines but stalled in a House committee on February 25. The measure aimed to protect consumers amid rising scam losses reported by the FBI.
In Olympia, Washington, Senate Bill 5280 proposed new safeguards for cryptocurrency kiosks, which allow users to buy or sell bitcoin using cash or debit cards at locations like supermarkets and gas stations. These devices transfer funds to digital wallets without bank connections, but they have become tools for scammers targeting vulnerable individuals, particularly those over 60.
The FBI reported $246.7 million in losses from crypto kiosk scams in 2024, with 72% of victims aged 60 or older. Scammers often fabricate crises, such as bank issues or legal troubles, to trick victims into depositing cash into kiosks, where transactions are quick, irreversible, and anonymous, making recovery difficult.
Prime sponsor Sen. Claudia Kauffman, D-Kent, emphasized consumer protection in an email: “We must continue to close gaps that allow bad actors to exploit emerging financial technologies, and this bill helps ensure innovation does not come at the expense of consumer safety.” The bill included a $2,000 daily transaction limit per consumer, fee restrictions, mandatory fraud warnings on kiosks, and transaction receipts.
Centralia Police Chief Andy Caldwell supported the effort, calling the scams “heartbreaking.” He noted cases like schoolteachers losing $20,000 and elderly people forfeiting $10,000 life savings, with no recovery options.
Washington has 482 such kiosks, per the Department of Financial Institutions (DFI), which requested the bill. DFI policy director Drew Bouton stated it aimed for balance: “We think this is a convenience... but because it’s highly anonymous, there is a lot of crime associated with it.”
Introduced in the 2025 session, the bill passed the Senate but not the House. This year, it cleared the Senate 37-12, had a public hearing in the House Consumer Protection and Business Committee on February 24, but was deferred the next day, missing the cutoff.
An amendment by committee chair Rep. Amy Walen, D-Kirkland, suggested raising limits to $2,500 for new users and $10,500 for longer-term ones. Crypto operators like CoinFlip opposed the uniform cap; general counsel Larry Lipka advocated tiered limits, citing models in Illinois, Maryland, and Colorado.
Previously, Spokane banned kiosks in 2025 after statewide losses of $141 million in 2023, inspiring similar actions elsewhere. Passage would have aligned Washington with other states regulating these devices.