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The Kansas House on Thursday approved legislation that’s intended to safeguard Kansans from scams that employ cryptocurrency kiosks scattered across the state.
The House voted 118-5 to approve new regulation that will put in place measures that are intended to make it harder for fraudsters to use the those machines to dupe consumers into forking over thousands of dollars to get out of a jam.
The bill now goes to the Senate.
“Today’s vote is about protecting Kansans,” said Republican state Rep. Nick Hoheisel of Wichita, chair of the House financial institutions committee.
“Too many people have been targeted by scammers using these machines, and this bill puts real guardrails in place,” Hoheisel said.
“It gives consumers better information, stronger protections, and a fair shot to stop fraud before it happens,” he said.
There are about 31,000 cryptocurrency ATM machines nationally, including about 300 in Kansas.
Since at least 2021, the FBI has been warning about fraud schemes that used cryptocurrency ATMs and QR codes to get money from their victims.
The FBI reported that Americans lost more than $333 million last year – from January to November – through schemes that employed cryptocurrency ATM machines.
By comparison, two years earlier the FBI reported more than 5,500 complaints using
cryptocurrency kiosks with losses exceeding $189 million.
A 2024 report from the Federal Trade Commission indicated that people 60 and over were more than three times as likely as younger adults to report a loss using a cryptocurrency ATM machines.
The Kansas attorney general’s gets about 150 cryptocurrency complaints a year, most of which are related to cryptocurrency ATMs.
Plots generally involve scammers who contact consumers through unsolicited phone calls, text messages or emails, claiming a bank account is frozen or a relative is in trouble.
Scammers direct them to use a crypto ATM to secure funds and provide a QR code to transfer money directly to the scammer’s digital wallet.
They tell the consumer that depositing cash into the ATM will protect their money or address the fraudulent problem.
Last summer, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network issued a notice to financial institutions urging them to be vigilant in identifying and reporting suspicious activity involving virtual currency kiosks.
The speed and difficulty of reversing kiosk transactions make them an attractive payment mechanism for scammers, the agency said in its notice.
Once the victim makes the transfer with a kiosk, the fraudster running the scam instantly owns the digital currency and often immediately transfers the funds into another digital wallet or exchange account they control, the agency said.
Among other things, the bill would:
- Require virtual currency kiosk operators to be licensed and be regulated by the Office of the State Bank Commissioner. All unlicensed kiosk operators would be required to apply for a money transmitter license within 60 days after July 1, 2026.
- Require kiosk operators to post warnings on the screen of the machines in English and Spanish about the possibility of schemes to defraud consumers.
- Require each virtual currency kiosk operator shall hold any money or virtual currency provided as part of a transaction for 72 hours before it is processed.
- Limit transactions to $2,000 a day within the first two weeks of the initial transaction and only one transaction within the first 72 hours. The bill also sets a maximum of $10,000 in total transactions within the first 14 days of the initial transaction.
- Would allow any person in Kansas to request a full refund of the initial transaction for any reason from a virtual currency kiosk operator within the 72-hour holding period.
- Virtual currency kiosk operators could not collect direct or indirect charges related to a transaction that exceeds $5 in U.S. currency or 18% of the money transmission.
The bill had the support of Kansas Bankers Association, AARP, the Kansas Bureau of Investigation, the Kansas Credit Union Association and the Office of the State Bank Commissioner.
CoinFlip, a Chicago-based, global digital currency platform, testified as neutral but was generally supportive of the bill, although it wanted to see some tweaks.
Founded in 2015, CoinFlip is one of the world’s largest operators of virtual currency kiosks, with more than 6,000 locations across the United States.
It has operated in Kansas since 2019 and was originally granted a Kansas money transmitter license by the Kansas Department of Financial Institutions in June 2025.
“CoinFlip embraces licensing regimes as an effective means to create baseline requirements for operations, as well as effective oversight,” said Jon Turke, the company’s director of government affairs.
“The best defense for consumers is to be well-informed and well-alerted at the point of transaction,” he said in written testimony.
“The best defense for companies is to have the right tools in place to help identify and fight fraud and help law enforcement catch the bad actors,” he said.
However, Iowa Attorney General Brenna Bird last year sued CoinFlip, alleging that more than $13 million in transactions processed through the company’s cryptocurrency machines have been identified as scam transactions.
Bitcoin Depot also was neutral on the bill but asked that the cap on fees be removed and to adjust the transaction limits.
“Bitcoin Depot goes beyond simple compliance; we routinely engage with local, state, and federal law enforcement,” said Mike Geiselhart, government relations manager for Bitcoin Depot.
“We are active participants in Operation Shamrock, a vital initiative dedicated to educating the public and mobilizing against the scam industry.
“Furthermore, we share real-time intelligence through the Deconflict app, a key tool that allows investigators across different agencies to coordinate on related cases and prevent ‘siloed’ investigations,” he said in written testimony.
Early last month, Maine’s Bureau of Consumer Credit Protection announced a consent agreement with an operator of bitcoin kiosks, Bitcoin Depot, that recovered $1.9 million taken by third-party scammers who defrauded Maine consumers through their kiosks.