Chiara Bianchi
Spokane, Washington has become the first city in the state to outlaw crypto ATMs, after the City Council unanimously approved a full ban on virtual currency kiosks operating within its limits.
The decision impacts roughly 50 active cryptocurrency machines installed in locations such as convenience stores, gas stations, Safeway supermarkets, and Walgreens pharmacies. Kiosk operators have 60 days to remove their machines, or they risk civil penalties and possible loss of their business licenses, according to the newly passed ordinance.
The ordinance was introduced with the aim of protecting Spokane residents from crypto-related fraud, which city leaders say has become increasingly rampant. Council Member Paul Dillon described the machines as โa preferred method for scammersโ, especially those looking to target vulnerable populations.
The council cited the decentralized nature of crypto and the difficulty in tracking illicit transactions as key reasons for the ban.
According to text in the ordinance, cryptoโs anonymity has created a favorable environment for criminal activity, leaving victims with limited legal recourse after being defrauded.
State Efforts Stalled, Prompting Local Action
Spokane initially supported state-level regulation in late 2024, advocating for transaction caps and better consumer protections. However, after legislative efforts failed to advance, the city opted for a local solution.
The move comes amid a wave of financial fraud, with FBI data showing $6.5 billion in crypto-related scams across the U.S. in 2023 alone. Of that total, $5.6 billion in losses were directly linked to crypto ATMs, the city noted.
Elderly Americans were disproportionately affected, accounting for $2.8 billion in losses, despite making up just 17% of the population. Washington state ranked 10th in the nation for crypto-related losses, with a total of $368 million reported.
FBI Data and Suicide Links Deepen Concerns
Detective Tim Schwering of the Spokane Police Department described crypto ATM fraud as a โdaily problemโ, saying he regularly handles reports of victims losing thousands of dollars to these schemes. He confirmed that at least three suicides in Spokane County have been linked to these scams.
โIโve seen countless cases where funds sent through these kiosks end up overseas in places like China, North Korea, and Russia,โ Schwering testified.
He explained how scammers often impersonate law enforcement or IRS agents, convincing victimsโmostly seniorsโthat purchasing crypto through a kiosk is the only way to protect their money. In some cases, victims are threatened with jail time if they donโt comply.
โWeโve seen people lose their entire life savings,โ Schwering said, calling the issue one of the cityโs most urgent fraud threats.
Crypto ATM Regulation Gaining National Attention
The Spokane case may set a precedent, especially as Senator Dick Durbinโs Crypto ATM Fraud Prevention Actโintroduced in Februaryโremains in legislative limbo. While the federal bill has yet to move forward, Spokaneโs action could prompt more cities to take matters into their own hands.
