The decision came in a six to one vote Wednesday afternoon.
ST PAUL, Minn. — The St. Paul City Council voted Wednesday afternoon to ban cryptocurrency kiosks in the city. Councilmembers voted 6-1 for that, with many citing scams and taking advantage of people as reasons why.
“I think we’re doing the right thing today by banning these kiosks in the city of St. Paul,” Rebecca Noecker, Council President, said.
This comes after other cities have regulated or also banned the machines. Stillwater banned the kiosks earlier this year, and the City Council in St. Paul took their discussions into consideration.
As part of those discussions, those in favor and opposed to the kiosk ban spoke last week. A representative for Bitcoin Depot, one of the largest companies in this space, spoke in opposition.
“However, placing a reactionary ban on an industry that is already licensed and regulated by the state, which serves a legitimate financial purpose for many St. Paul residents, is unnecessary and will deprive many customers, particularly those who choose to transact in cash, of their only way of participating in the growing digital economy,” Ethan McClelland with Bitcoin Depot, said.
Others also voiced their concerns. Minnesota Retailers, the Minnesota Grocers Association and representatives for Convenience Retailing sent a letter last week, citing concerns for their members.
“Our members benefit from having Crypto-Kiosks in our stores,” that letter reads, pointing to rent paid from the kiosk operators to the stores.
“A prohibition in Saint Paul will unintentionally reduce the City’s visibility into kiosk activity, redirect transactions into neighboring communities with different rules, and make statewide enforcement more complex,” the letter continues.
A large part of the discussion centers around scams. Documents from the City Council point to FBI data on the number of scams that are connected to these kiosks.
According to the Internet Crime Complaint Center, there were nearly 150,000 cryptocurrency fraud complaints last year, with close to 11,000 related in some way to these kiosks.
The majority of those reports came from those over the age of 60.
“The number of retirees who are being hit with scams like this is huge,” Bryce Austin, a cyber security expert with TCE Strategies, said.
“We have a lot of people sending scam victims to these crypto ATMs.”
Austin says since the digital currency can be difficult to trace, scammers lean towards these machines.
“It’s a really easy way for the bad guys to cover their tracks,” Austin said. “So I think the explosion of scams against consumers is why the number of people using these for scam purposes is growing so quickly.”