Albuquerque Bans Crypto Kiosks as Fraud Epidemic Sparks Sweeping Crackdown

The Albuquerque City Council voted on Wednesday to completely ban cryptocurrency ATMs and cashier-facilitated virtual currency transactions within city limits, marking the most restrictive local action to date. Under the new ordinance, operators and host retail establishments have 45 days to dismantle and remove machines once officially notified. Residents can still buy, sell, mine, and hold digital assets through online exchanges and private software wallets; the ban applies strictly to physical terminals. Federal law enforcement data from the FBI’s Internet Crime Complaint Center (IC3) logged nearly 11,000 formal complaints tied to crypto kiosk fraud in 2024, with total reported losses exceeding $246 million.

District 1 Councilor Stephanie Telles, a co-sponsor of the ban, cited data indicating that up to 90% of local cryptocurrency kiosk transactions in Albuquerque are linked to fraudulent activity. Traditional online exchanges require extensive identity verification under federal Know Your Customer (KYC) guidelines and often place multi-day holds on cash deposits, but physical kiosks frequently operate with higher transaction limits and less stringent verification, charging user fees ranging from 10% to 20%. The machines—located in convenience stores, gas stations, and 24-hour bodegas—allow users to insert cash to purchase digital currencies like Bitcoin, transferring funds instantly to a digital wallet.

District 7 Councilor Tammy Fiebelkorn, who co-sponsored the measure, stated: “We cannot wait for federal regulators to solve this crisis while our residents are actively being targeted and harmed in our own neighborhoods.” The decision reflects growing bipartisan impatience among local and state officials who argue that federal financial regulators have failed to curb a localized epidemic of financial scams. Because these machines handle physical currency and execute transfers immediately across decentralized blockchains, they have become highly attractive tools for illicit actors.

Telles noted that the combination of instant ledger settlement, relative transaction anonymity, and the inability to reverse transactions makes the machines a preferred tool for “scammers, organized crime, and human traffickers.” In May, Bitcoin Depot—formerly the largest operator of cryptocurrency kiosks in North America—filed for Chapter 11 bankruptcy protection and subsequently pulled approximately 9,700 physical kiosks offline. CEO Alex Holmes pointed directly to the rapidly shifting legal landscape, citing newly imposed transaction limits and “in some jurisdictions, outright restrictions or bans” as key drivers of the company’s financial distress.

Albuquerque’s aggressive action mirrors a legislative domino effect at the state level. Indiana became the first state to implement an outright ban on cryptocurrency kiosks in March. Tennessee followed with its own statewide prohibition in July, and Minnesota’s ban went into effect in August. Delaware lawmakers have advanced a bill to restrict the machines, and New Jersey is currently debating a statewide ban. In Texas, legislators are weighing a total prohibition after state regulatory reports estimated that kiosk-related fraud drained $57 million from Texas residents in a single year.

Scams typically involve bad actors posing as government agents, utility company representatives, or tech support specialists who instruct victims—frequently elderly individuals—to withdraw cash from their bank accounts, locate a nearby crypto kiosk, and deposit the cash into a specific QR-code wallet address. Last year, the Washington, D.C. Attorney General’s office filed a lawsuit against kiosk operator Athena Bitcoin after investigators discovered that 93% of all cash deposits made across the operator’s seven D.C.-based kiosks over a five-month window resulted from fraudulent schemes. The median age of victims in those transactions was 71. While Athena Bitcoin has stated that it strongly disagrees with the lawsuit’s findings, the case has served as a primary case study for municipal governments justifying outright bans.

“No one who legitimately exchanges or transmits virtual currency uses these kiosks, because the high fees make them a ripoff,” Telles said. The escalating regulatory pressure, combined with local transaction limits, has triggered a severe financial contraction within the physical crypto kiosk industry.