Texas lost $57M to crypto kiosk scams in 2025. Lawmakers plan to ban the machines outright, joining three other states. A federal bill also targets the fraud.
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Texans lost an estimated $57 million to crypto kiosk scams in 2025. State lawmakers want to ban the machines outright, not just regulate them.
Rep. Cole Hefner plans to introduce legislation banning crypto kiosks entirely when the Texas legislature meets for its 2027 session. Texas House Speaker Dustin Burrows and Lt. Gov. Dan Patrick have already directed committees to study kiosk regulation and elder fraud through 2026.
Three states have already enacted bans. Indiana's prohibition takes effect in March 2026. Tennessee follows in July 2026. Minnesota's ban kicks in August 2026. At the federal level, the Crypto ATM Fraud Prevention Act (S.710) was introduced in Congress in 2025, aiming to establish consumer protections for virtual currency kiosk transactions.
The scam follows a familiar pattern. A fraudster contacts a victim, often elderly, with an urgent story about unpaid taxes, a warrant, or a compromised bank account. The victim withdraws cash and deposits it into a kiosk, sending cryptocurrency to a wallet the scammer controls. Once the crypto leaves the machine, recovery is nearly impossible.
The $56.8 million to $57 million in reported losses likely understates the problem. Many victims never report the crime out of embarrassment or confusion.
For the average crypto investor buying Bitcoin on Coinbase or Kraken, these bans change nothing. Crypto kiosks have always been a niche on-ramp, used mainly by people who prefer cash or lack access to traditional exchanges.
For kiosk operators like Bitcoin Depot and Coinme, the picture is different. Each new ban shrinks their addressable market. Compliance costs will climb for operators trying to stay legal in states that regulate rather than ban.
If Texas, one of the most pro-crypto states in the country, decides to ban an entire category of crypto infrastructure, it signals that even friendly jurisdictions have limits. The committee hearings begin in 2026.
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