Minnesota has banned the installation, operation, maintenance, and availability of virtual currency kiosks statewide under legislation that took effect on August 1, 2026. The measure, known as SF 3868 and signed by Governor Tim Walz on May 5, requires operators to deactivate existing machines immediately while allowing until December 31 to remove them from locations visible or accessible to the public.

State officials cited approximately $1 million in losses reported by residents from scams involving the machines between 2023 and 2025. The Minnesota Department of Commerce linked the schemes primarily to senior citizens, who were often pressured through fabricated emergencies to deposit cash at kiosks for rapid conversion into cryptocurrency that proved difficult to recover.

The department investigated 134 related complaints during that period. Separately, the FBI’s Internet Crime Complaint Center recorded more than $151 million in Minnesota losses connected to digital assets or crypto wallets in 2025 alone.

Scale of Operations Before the Ban

Data from CoinATMRadar indicated 201 crypto ATMs and kiosks were operating across the state just prior to the prohibition. Another accounting referenced roughly 350 licensed machines run by eight companies at the time the ban was approved. These terminals, commonly placed in convenience stores and similar retail sites, allowed users to purchase Bitcoin and other digital assets with cash.

Failure to meet the deactivation or removal deadlines constitutes a violation of state law. The two-stage timeline provides operators a window to wind down without immediate equipment abandonment while ensuring all units cease functioning on the effective date.

Parallel Shift Toward Bank Custody

On the same day the kiosk ban began, a companion measure took effect permitting Minnesota banks and credit unions to hold cryptocurrency for customers. Institutions must maintain strict segregation of client assets from their own, adopt written policies covering risk management, internal controls, cybersecurity, and business continuity, and provide the commerce commissioner with at least 60 days’ notice before launching custody services. Banks remain responsible for oversight even when using external providers.

St. Cloud Financial Credit Union introduced its CU-Digital Asset Vault product in March 2026, ahead of the formal legal clarification. By July, members had stored roughly 13.5 Bitcoin through the platform, which employs a shared-control model so that no single party can move funds independently. The credit union described the new statute as eliminating a previous regulatory gray area that had discouraged broader participation.

Wider State-Level Actions

Minnesota’s full prohibition joins similar steps elsewhere. Tennessee began enforcing a complete ban on crypto ATMs on July 1. Georgia imposed transaction limits and additional restrictions on the same date. Lawmakers in Delaware and New Jersey have advanced bills proposing comparable controls.

Residents seeking to acquire cryptocurrency may continue to do so through regulated online exchanges that hold appropriate money-transmitter licenses. State authorities advise verifying registration status and remaining alert to pressure tactics that demand immediate purchases under claims of urgent threats or family crises.

The combined measures aim to close a channel frequently exploited in fraud while establishing supervised pathways for digital-asset activity within traditional financial institutions.