Spokane crypto kiosks banned after $141 million in scam losses

The City of Spokane is banning all cryptocurrency kiosks in the city in response to the surge of crypto scams from the machines which netted more than $141 million in losses in Washington in 2023.

Additionally, the FBI reported nearly $5.6 billion in nationwide losses due to cryptocurrency kiosk-aided scams in 2023.

Spokane crypto kiosk ban

The Spokane City Council unanimously voted on the “Virtual Currency Kiosk Prohibition for a Safer Spokane” ordinance on Monday, making Spokane the first city to eliminate cryptocurrency kiosks.

“This ordinance provides for a tool to protect consumers from those individuals who rely primarily on virtual currency to defraud others,” the ordinance stated.

Cryptocurrency transfers are initiated by taking coins that have been purchased and sending them to an address, or wallet, represented by either a QR code or a long series of letters and numbers.

“This ordinance will protect vulnerable Spokane residents from scams involving virtual currency kiosks, and I am proud we are the first city in the state to move this legislation forward,” Council Member Paul Dillon stated. “These kiosks have become a preferred tool for scammers looking to defraud unsuspecting victims.”

Cryptocurrency kiosks function like a regular bank ATM; however, these kiosks do not dispense physical currency. Instead, users can purchase virtual currency to be stored in a personal crypto wallet or transfer the money anywhere in the world.

Once a cryptocurrency transfer is made, it’s not possible to recover the funds unless it’s sent back by the recipient.

“I’ve had a number of cases where this money that’s placed in there will end up in places like China, North Korea, Russia,” Spokane Police Department Detective Tim Schwering told the council, according to The Center Square. “Places that don’t have diplomatic relationships with the United States. What is happening is people are getting scammed.”

Schwering further explained how scammers have posed as law enforcement or the Internal Revenue Service (IRS), who then coerce their target to buy cryptocurrencies from the kiosk as a remedy for protecting their money. These scammers often target senior citizens and tell them they could face jail time if they do not comply, according to The Center Square.

The ordinance demands that kiosk operators remove all ATMs within the city limits over the next 60 days. Failure to do so could result in a civil infraction and the loss of their business license, according to The Center Square.

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