N.J. wants to be the 4th state to ban these high-tech crypto ATMs. Should they be gone?

By Jana Cholakovska, NJ.com

An 80-year-old woman got a pop-up on her computer telling her to call Apple support immediately. The person who answered directed her to a Bitcoin ATM, where she deposited $9,500.

She never saw the money again.

Her story, recounted at a Trenton hearing this week by an AARP fraud awareness speaker, is one of 369 documented New Jersey cases last year totaling $18 million in losses, according to federal data. The machines — often tucked into bodegas, gas stations and convenience stores — look like regular ATMs but convert cash into digital currency that is nearly impossible to trace or recover.

A bill that would ban the machines cleared the Senate Commerce Committee unanimously Monday and now heads to the full Senate. A companion bill is moving through the Assembly.

“They are high-tech machines that facilitate fraud, scams and other illegal activities,” state Sen. Paul Moriarty, D-Gloucester, told the committee Monday. “And the owners of these networks take a big cut of the illicit proceedings. They may not be the scammers, but they’re the middlemen taking a big cut and making it happen.”

The kiosks let users pay a hefty fee to exchange cash for cryptocurrency, which is then sent to a digital wallet. Unlike a bank transfer, the transactions are instant and irreversible, according to testimony at the hearing. Fees at CoinFlip machines, the largest operator in the Garden State, with 124 ATMs spread across more than 100 New Jersey municipalities, range from 6 to 19% of the transaction amount, according to Larry Lipka, CoinFlip’s general counsel, who testified at the hearing. On the $9,500 that Marlene, the 80-year-old woman identified only by her first name in testimony, lost, CoinFlip would have collected roughly $1,200 to $1,300 in fees, based on figures Lipka provided to the committee.

The scam follows a familiar pattern, according to law enforcement and consumer advocates who testified. A caller claims to be from the government, law enforcement, a bank or tech support. They create a sense of panic — a warrant, a frozen account, a hacked computer — and instruct the victim to withdraw cash and deposit it into a nearby kiosk. The money converts to cryptocurrency and vanishes.

“Nobody is walking in there saying, I got my paycheck today, I think I’ll buy a little bit of bitcoin,” Moriarty said in an interview with NJ.com.

The machines have been on New Jersey’s radar for years. A 2021 report by the state Commission of Investigation found the kiosks were being used for scams and money laundering, and called for strict new regulations. The legislature never acted. Moriarty first brought the issue before the committee in February 2025, but got a discussion-only hearing with no vote. Since then, New Jersey victims have lost tens of millions more.

New Jersey has become a particular target. Richard Soden, an AARP member who travels the state speaking to senior centers and community groups about fraud, told the committee that an official from the Brooklyn District Attorney’s Financial Crimes unit had alerted lawmakers that scammers are deliberately directing victims across the river to deposit money at New Jersey machines. The state has become “the venue of choice for scammers,” Soden said.

Seniors are particularly at risk.

Statewide, older adults are more than three times as likely as young adults to report losing money to these scams, Moriarty said, citing federal data. Nationally, people over 50 accounted for more than half of nearly 13,500 complaints filed with the FBI’s Internet Crime Complaint Center in 2025, with losses topping $388 million — a 58% increase over the year before, according to FBI data Moriarty cited at the hearing.

“Often, people don’t report this,” Moriarty said at the hearing. “They are so embarrassed that they have been taken that they don’t even come forward. It leads to some really dire consequences in their life, both financially and mentally.”

Larry Lipka, general counsel for CoinFlip, which calls itself the world’s largest crypto kiosk operator, testified against the ban, arguing for strict regulation rather than prohibition. He pointed to the company’s transaction monitoring, blockchain analytics tools, consumer protection holds and 24-hour customer service, and said CoinFlip’s scam rate in New Jersey is less than 1% of transactions and that the company has nearly 23,000 customers in the state.

“It belies logic to say that all 23,000 are scam victims or money launderers,” Lipka told the committee.

But under questioning by state Sen. Jon Bramnick, R-Union, Lipka acknowledged that CoinFlip has processed more than $6 billion in transactions nationally — meaning the company’s own 1% figure implies at least $60 million in potential fraud losses across its network.

Bramnick was unconvinced. “Who goes to a crypto ATM and gets crypto?” he said. “Other than the fraud, nobody.”

Moriarty said he does not trust CoinFlip’s figures. “I have no idea how they’re counting a customer,” he said. He also disputed the company’s claim that its machines serve a legitimate market. “They’re selling Bitcoin at five to 15 times more than you could buy it anywhere else,” he said. “Why would anyone buy it there?”

CoinFlip’s compliance record in other states has drawn scrutiny. The Texas Department of Banking issued consent orders against the company in both 2023 and 2026 for conducting unlicensed money transmission. In May, Missouri’s attorney general sued CoinFlip, alleging the company knowingly facilitated fraudulent transactions and charged hidden fees as high as 21.9%, according to court filings. Lipka called the Missouri lawsuit “salacious, meant to grab headlines” and said its allegations “are not correct.”

“CoinFlip has long advocated for common sense consumer protections, engaging with regulators and legislators to share information and real-world experience,” Amy Patti, CoinFlip’s senior communications director, said in an email statement to NJ.com. “The 23,000 New Jersey customers who have relied on our services deserve legislation that protects them from bad actors while preserving their freedom to engage with the digital economy as they choose. The answer to combating fraud is smart regulation, not blanket prohibition.”

New Jersey would join a rapidly growing list of states moving against the kiosks. Indiana became the first to ban them outright in March, followed by Tennessee in April and Minnesota in May. Delaware advanced a similar bill the day after New Jersey’s committee vote. Across the country, 30 states introduced legislation related to cryptocurrency kiosks in 2026 alone, according to AARP, though most have opted for regulation rather than an outright ban. Bitcoin Depot, until recently the industry’s largest operator, filed for Chapter 11 bankruptcy in May after revenue fell nearly 50% year over year, with its CEO citing an increasingly hostile regulatory environment.

CoinFlip made the same argument against a ban — regulate rather than prohibit — in Indiana, Tennessee and Minnesota. All three banned the machines anyway. The committee voted 5-0 to advance the New Jersey bill Monday.

“I just want them gone,” Moriarty said.