Lawmakers [Moriarty and Hutchison] in New Jersey aim to outlaw crypto ATMs, citing ‘rampant’ scams

By Emma Kinery, State Affairs

A set of bills in New Jersey seek to fully ban cryptocurrency ATMs from operating

in the state.

Crypto ATMs — also known as bitcoin ATMs, BTMs and virtual currency kiosks

— allow customers to convert cash into cryptocurrency and deposit it in a digital

wallet. The machines have become ubiquitous, frequently seen in gas stations and

corner stores, and scammers have begun increasingly using them to dupe victims,

often elderly Americans, into sending them cash.

As these scams rise, state lawmakers have taken action: Last year, 10 states enacted

laws to regulate the machines, and lawmakers in several other states introduced

legislation to do so. At least 22 bills have been introduced in 13 states so far this

year.

The New Jersey proposal stands out as one of only a few bills that aim to outright

ban the machines.

Assembly Bill 3244 and Senate Bill 2141 “prohibit any business entity from owning, controlling, installing, or managing a cryptocurrency automatic teller machine

(ATM) in this state.” Under the legislation, violators would be subject to a penalty

of up to $10,000 for the first offense and up to $20,000 for each subsequent offense.

“These machines are nothing more than conduits for fraud and criminal activity.

Period,” Sen. Paul Moriarty, D-Gloucester, primary sponsor of the Senate bill,

told State Affairs. “There’s no other use for them, because if you wanted to buy

cryptocurrency you could buy it somewhere else for less.”

Assemblyman Dan Hutchison, D-Gloucester, who is the primary sponsor of the

Assembly bill, echoed the sentiment and said it was important the legislature take

“swift action” because the fraud is “far too rampant.”

“Time and again, my office has encountered the same disturbing pattern, often

involving senior citizens,” Hutchison said. “Victims receive a phone call from an

unknown caller who immediately creates a sense of panic. While the individual is

in a compromised and emotional state, they are instructed to deposit large sums of

cash into a cryptocurrency ATM. Once those funds are deposited, they are typically

untraceable and, in most cases, gone forever.”

New Jersey residents lost $435 million to cryptocurrency scams in 2024, according

to FBI data, ranking sixth among states for total losses. Cryptocurrency fraud overall

cost Americans $5.6 billion in 2023, a 45% increase over the prior year, according

to FBI data.

Fraud losses due to these scams increased tenfold between 2020 and 2023, according

to a Federal Trade Commission report. More than half of the FBI complaints related

to crypto ATM fraud in 2023 came from Americans over the age of 60.

Senior citizens, who are familiar with how ATMs operate, become easy targets for

what would typically be an otherwise foreign concept. Scammers would find it

onerous to try to guide older Americans over the phone to wire money to purchase

cryptocurrency to then send to their digital wallet. The cryptocurrency ATM alleviates all of that.

“Unlike traditional ATMs, cryptocurrency ATMs generally only allow users to deposit cash, with no ability to withdraw funds. These machines are frequently located

in gas stations, fast food restaurants, and similar establishments — places where

individuals should not be pressured into making high-dollar financial decisions,”

Hutchison said. “This combination of accessibility, urgency, and lack of safeguards

makes crypto ATMs a powerful tool for scammers and a serious risk to consumers.”

Two of the largest operators of the machines in the U.S., though, told State Affairs

an outright ban goes too far.

“Bitcoin Depot supports efforts to protect consumers and agrees that preventing

fraud should be a priority,” a spokesperson said. “We believe, however, that effective

consumer protection is best achieved through clear, consistent regulation rather than

outright bans on the industry.”

A spokesperson for CoinFlip said the company takes pride in working constructively

with policymakers and will continue to advocate for smart regulation that protects

consumers from bad actors.

“Crypto kiosks are an important bridge between the physical and digital world using

a familiar experience, allowing hundreds of thousands of people around the world to

participate in the digital economy,” the spokesperson said. “We can’t speak for the

entire industry, but we take consumer protection seriously and hold ourselves to the

highest standards of compliance and transparency.

“As evidenced by our strong public support of legislation, we strongly believe in

commonsense rules and clear disclosures, and want everyone in the industry to be

held to the same high standards we meet voluntarily.”

Other New Jersey legislation introduced by Assemblyman Sterley Stanley, D-East

Brunswick, and Sen. Raj Mukherji, D-Jersey City, seeks to regulate bitcoin ATMs

while still allowing them to operate in the state.

The companion bills — Assembly Bill 3386 and Senate Bill 2957 — would require a

notice to be displayed on the machine alerting users to potential scams, that the kiosk

does not dispense U.S. dollars like typical ATMs, "disclosure that virtual currency

is not legal tender,” and the customer’s “liability for unauthorized virtual currency

transactions.”

The legislation would also require the company to employ a compliance officer and

a consumer protection officer; obtain a money transmitter license from the New

Jersey Department of Banking and Insurance; and inform the department of its kiosk

locations. The kiosks would also be required to be in a secure area such as “but not

limited to, banks with functioning security cameras and lighting.”

The bills include several provisions common in other pieces of regulatory legislation.

Most of the laws passed in 2025 included provisions such as placing a cap on the

amount new users can deposit in a day, mandating warnings be displayed on kiosk

screens alerting users to common fraud tactics, requiring users to acknowledge the

warnings before proceeding, and requiring machines to provide transaction receipts,

which can be essential to tracing transactions and proving fraud.

Some states also require operators to issue full refunds to new customers who are

defrauded, as long as they report they were a victim of fraud within a certain time

period.

The bills introduced so far this year include:

Alabama: House Bill 303

Arizona: House Bill 2232

Georgia: House Bill 945

Hawaii: House Bills 1642, 1647, 2003; Senate Bills 2387, 3185

Michigan: House Bill 5469

Mississippi: House Bill 1264

Missouri: House Bill 3043; Senate Bill 1510

New Hampshire: Senate Bill 482

New Jersey: Assembly Bills 3244, 3386; Senate Bills 2141, 2957

Oklahoma: Senate Bill 2025

Utah: House Bill 72; Senate Bill 173

Washington: House Bill 1268

Wisconsin: Assembly Bill 968

Emma Kinery is a State Affairs national reporter covering state politics and policy out

of our Washington, D.C. office. Contact Emma Kinery at ekinery@stateaffairs.com

or on X @EmmaKinery.