Texas recorded $56.8 million in cryptocurrency kiosk losses in 2025, outpacing every other state, according to FBI data presented to a legislative committee. Texans filed 1,179 complaints with the bureau, contributing to a national total of 13,460 reports, while overall US losses surged 58% to $389 million for the year.
Crypto Kiosks and Fraud Trends
Cryptocurrency kiosks, often found in convenience stores and gas stations, allow customers to convert cash into digital assets. The Texas Tribune reported nearly 4,000 such machines are in use across the state. These kiosks have increasingly become tools for scammers, who convince victims to withdraw funds from their bank accounts and deposit cash directly into the machines.
During invited testimony before the House Committee on Homeland Security, Public Safety and Veterans’ Affairs, Rep. AJ Louderback described the scale and efficiency of crypto scam operations. He remarked that throughout his career, he has never encountered “a more efficient, cleaner way to steal money.” Kelley Currie, a fellow at the Atlantic Council, informed the committee that Interpol now regards scamming as a criminal industry on par with trafficking in drugs and humans.
Currie claimed that many kiosks located in gas stations are “run by Chinese money launderers.” The Justice Department has prosecuted Chinese nationals for crypto fraud operations in Southeast Asia, as well as Chinese money laundering networks handling scam proceeds. However, authorities have not directly tied those groups to general operation of crypto kiosks in the US.
Jesse Saucillo, deputy commissioner at the Texas Department of Banking, highlighted the difficulty of tracing and recovering funds once stolen. He stated that laundered money typically enters an unhosted digital wallet before being transferred through mixing services, making it nearly impossible for victims to reclaim their funds. Saucillo also noted the rise of AI-generated impersonation tactics, which have made scam calls appear more convincing.
Growing State Regulation and Outright Bans
AARP reports that 30 states have enacted or proposed legislation related to cryptocurrency kiosks since 2023. Some states have moved to cap daily or monthly transaction values and require operators to refund fraud victims. South Dakota, for example, limits transactions to $1,000 per day and $10,000 per month, while Wisconsin and Virginia have adopted similar caps. Maine’s regulator has secured a $1.9 million settlement from Bitcoin Depot to reimburse affected consumers.
Legislative scrutiny has increased amid concerns about the growing role of crypto kiosks in financial crime. Lawmakers in Texas indicated that they may consider tougher regulations or even a ban in the coming months. Committee chair Rep. Cole Hefner suggested that legislative action could go further than current regulatory measures. He alluded to “a pretty good idea coming down,” characterizing it as “kind of simple, but kind of abrupt.”
States Move to Outlaw Crypto Kiosks
Indiana became the first state to prohibit cryptocurrency kiosks outright in March. The law allows the attorney general to take legal action against both kiosk operators and the businesses hosting them. Nearly 900 kiosks were functioning in Indiana at the time of the ban.
Shortly afterward, Tennessee enacted its own ban through House Bill 2505, which Governor Bill Lee signed into law in April. The measure provides that it is now a criminal offense in Tennessee to own or operate such machines, regardless of whether they facilitate purchase of Bitcoin or other digital assets. Kiosk operators in Tennessee must cease operations by July 1.
Minnesota has also recently joined the list of states prohibiting these machines, reflecting a wider national push to curb fraud and illicit activities linked to cryptocurrency kiosks.
As regulators target fraud and loss linked to crypto kiosks, attention has grown on tools that increase transparency and lower barriers for mainstream investors. Platforms such as 1stepSwap play a role here by enabling users to access major US equities and commodities directly via blockchain wallets. This system sources the most favorable market rates in real time, allowing fast transactions with top stocks and diversifying portfolios without the need for intermediaries or complex onboarding processes.
