Kentucky lawmakers have unanimously advanced House Bill 380 and Senate Bill 189 to regulate cryptocurrency kiosks, imposing transaction caps, ID requirements, and waiting periods to protect users from scams that have cost residents millions. The measures follow testimony from victims and law enforcement during a Frankfort committee hearing.
Cryptocurrency kiosks, similar to ATMs and found in grocery stores and gas stations, enable quick cash-to-crypto exchanges but are exploited by scammers for irreversible, hard-to-trace transactions.
In 2025, Kentucky saw about $106 million in cyber-enabled fraud losses, with $60 million tied to crypto scams. The state has 400 to 450 kiosks, including 200 to 250 around Louisville.
During Wednesday's Frankfort hearing on House Bill 380, sponsored by Rep. Tom Smith, witnesses detailed the dangers. Navy veteran Harold Miller from Danville recounted a scam call posing as the Boyle County Sheriff’s Office, alleging arrest warrants and demanding $7,500 via a kiosk. "It was a very professionally done scam," Miller said, crediting his cybersecurity background for spotting it.
Montgomery County Sheriff David Charles noted tracing challenges: "We’ve had several. One in neighboring Tarrant County that came to us for help was $200,000 from senior citizens. That money has gone untraceable." FBI Supervisory Special Agent William Kurtz highlighted crypto's recovery difficulties compared to banks, while AARP Kentucky's Gary Adkins called scams "violent" emotionally.
The committee substitute for HB 380 caps daily transactions at $2,000, adds a waiting period for first-time users, requires identification for every transaction, and includes criminal penalties. It passed unanimously. Senate Bill 189 complements these efforts.
Operators like CoinFlip (using "Safe in Six" screening) and Bitcoin Depot support reasonable rules, including ID checks. Seventeen states already regulate kiosks. The FBI urges reporting to ic3.gov and avoiding transfers to strangers.