Starting August 1, 2026, Minnesotans will no longer find crypto ATMs at gas stations or convenience stores. These machines, which convert cash into cryptocurrency instantly, are now banned statewide. At the same time, banks and credit unions in Minnesota can begin offering regulated crypto custody services to their customers.
Why Crypto Kiosks Were Shut Down
Crypto kiosks have been a favorite tool for scammers targeting everyday people. The scam usually starts with a call or email pretending to be from authorities or a relative in urgent trouble. The victim is urged to quickly convert cash into crypto at a nearby kiosk. Once transformed into digital coins, the money vanishes offshore and becomes almost impossible to recover.
The Minnesota Department of Commerce documented 134 complaints linked to these kiosks from 2023 to 2025, with losses nearing $1 million. Nationwide, the FBI reported over 11,000 such cases costing victims more than $240 million, mostly affecting those over 60 years old. Grace Arnold, Minnesota's Commerce Commissioner, emphasized there is no safe crypto kiosk, highlighting the human toll behind every complaint.
Before the ban, about 350 licensed kiosks operated in Minnesota, managed by eight different companies. All machines had to stop operating by August 1 and must be removed from stores by the end of 2026. Buying crypto is still allowed but limited to regulated online exchanges, removing the street-level risk.
New Safeguards with Bank Custody
Coinciding with the kiosk ban, Minnesota passed a law allowing local banks and credit unions to hold cryptocurrencies for their clients. This move introduces greater protections compared to unregulated apps or offshore platforms.
Customer crypto assets are legally separated from the bank’s own funds, preventing them from being affected if the bank encounters financial trouble. Banks can use third-party custody providers but retain full responsibility for safeguarding client holdings. This development could redefine how Minnesotans manage digital wealth safely, offering a regulated alternative to risky kiosks.
This material is for informational purposes only and does not constitute financial advice.
