• Spokane is Washington’s first city to ban crypto ATMs. 
• Ordinance addresses $141M in state scam losses in 2023. 
• Elderly residents are frequent targets of crypto scams.

On June 17, 2022, the Spokane City Council unanimously voted to prohibit the use of crypto ATMs in the city, becoming the first city in Washington to single out these devices. The ordinance, called the Virtual Currency Kiosk Prohibition Toward a Safer Spokane, addresses the growing fraud linked to these machines. Within 60 days, officials will require operators to remove about 50 kiosks or face fines and possible revocation of their business licenses.

Cryptocurrency fraud caused severe financial losses, prompting officials to make the move. In 2023, the FBI recorded losses of crypto ATM scams around the country, amounting to a total of $5.6 billion, with residents of the state of Washington having lost more than 141 million dollars. The city of Spokane has been experiencing a steady increase in the number of victims who have lost thousands of dollars to the fraudulent business carried out in these kiosks, mostly found in gas stations and convenience stores.

Council Member Paul Dillon, who co-sponsored the ordinance with Council President Betsy Wilkerson, stated that he meant it to serve a protective purpose. In Dillon’s view, this will safeguard disadvantaged locals against financial fraud via the use of digital currency kiosks. The law aims to protect low-income or elderly groups, who are common targets of fraud.

Rising Scams Prompt Swift Action

Crypto ATMs are just like conventional ATMs, as they have virtual transactions that are made using the currency rather than cash. Scammers, pretending to be government officials, use these machines to force victims to make payments to avoid fabricated penalties. Detective Tim Schwering of the Spokane Police Department said they typically send the money to countries like China, North Korea, or Russia, where authorities can never trace it.

In 2024, the FBI received almost 11,000 complaints and reported $246 million in losses due to crypto ATM scams, marking a 31 percent increase compared to the previous year. Elderly residents, particularly those over 60, made up two-thirds of the victims, highlighting their vulnerability. The ordinance of Spokane is a reaction to the trends as the city seeks to limit fraud by not allowing them physical access to these kiosks.

Councilman Zack Zappone underscored the urgency of the ban. He stated: These machines are used to victimize vulnerable communities, resulting in substantial financial losses. The council plans to monitor the ordinance’s impact, with the Spokane Police Department charged with documenting any changes in the frequency of crimes using cryptocurrency.

The action is one in line with increased U.S. regulatory actions against crypto ATMs. Others, such as Wisconsin, have issued guidelines to restrict transactions and increase oversight, and recently, the financial crimes agency in Australia put an A$5,000 limit on cash transactions to curb fraud. The total prohibition established in Spokane becomes a precedent that may affect other municipalities.

Coin ATM Radar estimates that there are some 45 crypto ATMs in and around Spokane, including such large operators as Coinflip and Bitcoin Depot, which is targeted by the prohibition. The city is hell-bent on making sure its citizens are secure, thus, failing to comply would result in hefty sanctions.