Minnesota is preparing for a serious move. State lawmakers are considering a complete ban on cryptocurrency kiosks in response to a widespread wave of scams primarily targeting seniors.

The problem is real. Over the past year, the Minnesota Department of Commerce received about 70 complaints about cryptocurrency kiosks, with reported losses of around $540,000. But here’s the scariest part: only 48% of victims recovered at least some of their funds, and on average, it was only 16% of what they lost. At the national level, the FBI has recorded losses of approximately $333 million through such schemes.

Fraud schemes operate on a simple formula: malicious actors impersonate government officials, tech support, or close contacts, persuade victims to deposit cash via kiosks, and after converting to crypto, the funds become nearly untraceable. Attorney General Kate Ellison explicitly stated: “Legitimate officials will never demand payment through cryptocurrency kiosks.”

Around 350 such kiosks operate in Minnesota. Bill HF 3642 proposes a full ban on them, although it will not affect online cryptocurrency operations. Supporters of the ban argue that it’s simpler than trying to implement fragmented security measures that vary depending on the operator.

But the industry is resisting. Kiosk operators, including CoinFlip, claim that the kiosks serve legitimate users who rely on cash. They offer an alternative: targeted regulation, transaction limits, warning screens, and cooling-off periods for new users. Industry representatives emphasize that less than 1% of their transactions in Minnesota required refunds.

The debate unfolds amid some market volatility. BTC is currently trading around $77,800 with short-term fluctuations reflecting overall uncertainty in the crypto space. But the real uncertainty here is political: will Minnesota be the first state to fully ban cryptocurrency kiosks, or will the industry manage to convince lawmakers of the effectiveness of self-regulation?