DELAWARE - More than $26 million dollars was lost to scams involving cryptocurrency ATMs in Delaware last year, according to some lawmakers.
“These kiosks reduce digital currency to a predatory cash grab,” said Rep. Cyndie Romer, Chair of the House Technology & Telecommunications Committee and a sponsor of a new bill to enact a total ban on all cryptocurrency kiosks within the first state.
Cryptocurrency kiosks, also known as Bitcoin ATMs, are physical machines where customers can buy, sell, or exchange cryptocurrencies, like Bitcoin or Litecoin. They are often found in gas stations or grocery stores.
The bill says the machines are increasingly being used to scam older people by messaging victims over social media with investment opportunities, then directing them to deposit large sums of cash into the ATMs to cryptocurrency. The scammer will then have the victim deposit that cash into the scammer's cryptocurrency wallet.
They say if passed, the bill would require all existing machines to be taken completely offline immediately, with a requirement for full physical removal within 90 days of the law taking effect. Since 2023, 30 states have enacted legislation related to the regulation of cryptokiosks, but Tennessee, Indiana, and Minnesota already have comprehensive, state-wide bans.
“As cryptocurrency becomes more prevalent in our society, we must work to properly regulate this new digital asset market,” said Senator Spiros Mantzavinos, Senate sponsor of House Bill 441.
Under the bill, a violation of the kiosk ban would be treated as an unlawful practice and a prohibited trade practice under Delaware’s consumer protection laws. Any operator collecting fees from illegal transactions would be required to fully refund the victim within 30 days or forfeit the money to Delaware’s Consumer Protection Fund.
