Texas led the United States in reported losses linked to cryptocurrency kiosks in 2025, with residents filing complaints totaling $56.8 million. Federal data presented to a state legislative committee showed 1,179 complaints from Texas, part of a national total of 13,460 reports and $389 million in overall losses, a 58 percent increase from the prior year.

The machines, which convert cash into digital assets, are common in convenience stores and gas stations. Roughly 4,000 operate across Texas. Scammers typically persuade victims to withdraw funds from bank accounts and insert the cash directly into a kiosk, after which recovery becomes extremely difficult.

Legislative Hearing Details Scale of Problem

During testimony before the Texas House Committee on Homeland Security, Public Safety and Veterans’ Affairs, lawmakers heard that the schemes rank among the most streamlined methods of theft encountered by officials. Funds usually move quickly into unhosted digital wallets and then through mixing services, sharply reducing the chance of retrieval.

An outside witness described cryptocurrency-related scamming as a criminal industry comparable in scale to drug and human trafficking. The same witness stated that many kiosks located in gas stations are operated by Chinese money launderers. Federal authorities have pursued Chinese nationals in Southeast Asian scam-center cases and prosecuted related money-laundering networks, though they have not stated that those networks generally control U.S. kiosk operations.

Officials also noted the growing use of artificial-intelligence-generated impersonations of police and state agencies, which make scam calls more convincing to potential victims.

States Enact Bans and Transaction Limits

Indiana became the first state to prohibit cryptocurrency kiosks outright in March, when nearly 900 machines were operating there. The law authorizes the attorney general to pursue both operators and the businesses that host them. Tennessee followed with legislation signed in April that makes ownership or operation of the machines a criminal offense; operators were required to shut down by July 1. Minnesota has also banned the devices.

Approximately 30 states have enacted or proposed measures addressing cryptocurrency kiosks since 2023. Several have imposed daily and monthly transaction caps. South Dakota limits activity to $1,000 per day and $10,000 per month and requires operators to refund fraud victims. Wisconsin and Virginia have adopted comparable limits. Maine’s regulator obtained a $1.9 million settlement from one major operator to reimburse affected consumers.

Federal financial authorities have also increased scrutiny. A 2025 notice from the Financial Crimes Enforcement Network directed institutions to monitor activity involving convertible virtual currency kiosks, citing risks tied to fraud, cybercrime, and other illicit finance.

Texas Signals Possible Stronger Action

Committee chair Rep. Cole Hefner indicated that Texas may move beyond existing regulatory approaches. He told colleagues he has a legislative idea that is both straightforward and decisive, though he did not release specific details at the hearing. No bill has been filed.

One major national operator filed for bankruptcy earlier in 2026, citing rising litigation and regulatory pressure, and closed its Texas locations as part of that process. Another operator has publicly backed stronger consumer protections in Texas while separately challenging Tennessee’s ban in federal court. A request for an emergency halt to enforcement of the Tennessee law was denied in July, allowing the prohibition to remain in effect while the broader case continues.

Lawmakers and regulators continue to weigh options ranging from tighter transaction rules and refund mandates to outright prohibitions as reported losses climb and recovery of stolen funds remains rare.