Spokane Takes a Stand: Crypto ATMs Banned to Curb Rising Scams

Introduction

In a decisive move to protect its residents, Spokane, Washington’s second-largest city, has become the first in the state to ban cryptocurrency ATMs. The unanimous decision by the Spokane City Council on June 16, 2025, responds to a surge in scams exploiting vulnerable individuals through these kiosks. With operators given 60 days to remove dozens of machines, this article explores the reasons behind the ban, its implications, and the broader context of crypto-related fraud in the U.S.

Unanimous Vote Targets Fraudulent Kiosks

The Spokane City Council voted unanimously to enact the “Virtual Currency Kiosk Prohibition for a Safer Spokane” ordinance, proposed by Council Member Paul Dillon and Council President Betsy Wilkerson. The measure aims to eliminate crypto ATMs, which have become a preferred tool for scammers targeting vulnerable residents, particularly seniors, in low-income areas and retail locations like convenience stores and gas stations. According to Coin ATM Radar, Spokane had approximately 45 crypto kiosks before the ban, operated by companies like Coinflip and Bitcoin Depot. Operators now face civil infractions and potential business license revocation if they fail to comply within the 60-day deadline.

Rising Scams Fuel Regulatory Action

The ban was spurred by a significant increase in crypto ATM-related scams, with the FBI reporting $5.6 billion in losses nationwide in 2023, including $141–$142 million in Washington state alone. Spokane Police Department Detective Tim Schwering highlighted the issue, noting frequent cases of residents, especially seniors, losing thousands to fraudsters who exploit these kiosks by substituting traditional gift card scams with Bitcoin transactions. The Spokane ordinance cites daily scam reports and three suicides linked to financial losses, underscoring the urgency of the measure. The city’s action follows a broader U.S. trend of tightening oversight on crypto kiosks due to their role in facilitating fraud.

Local and National Context

Spokane’s ban makes it one of the first U.S. cities, alongside Stillwater, Minnesota, to outlaw crypto ATMs, positioning it as a pioneer in addressing this issue. Posts on X highlight the severity of the problem, with users noting that funds from these scams are often traced to countries like China, Russia, and North Korea. The ordinance comes after failed attempts at state-level regulation in Washington, with Councilman Jonathan Bingle praising Spokane’s move as “cutting edge” for the state. Nationally, the crypto industry faces evolving regulations, as evidenced by the recent Senate passage of the GENIUS Act for stablecoins, signaling a broader push for consumer protections in digital finance.

Potential Impacts and Challenges

The ban aims to reduce financial fraud, but its effectiveness remains under scrutiny. The Spokane City Council plans to monitor the ordinance’s impact on reported scam rates, with reports due to assess its success. Critics argue that banning physical kiosks may push scam activities to online platforms, which are harder to regulate due to state and federal jurisdiction. Additionally, the crypto industry, which spent $250 million in the 2024 election cycle to influence policy, may resist such measures, viewing them as barriers to mainstream adoption. While the ban protects vulnerable residents, it could limit legitimate crypto access for others, potentially driving transactions to less regulated channels.

Conclusion

Spokane’s bold decision to ban crypto ATMs reflects a proactive stance against the rising tide of scams exploiting its residents. By prioritizing consumer safety, the city sets a precedent for others grappling with similar challenges in the evolving crypto landscape. While the ban addresses immediate concerns, its long-term impact depends on enforcement and the adaptability of scammers. As the U.S. navigates the balance between innovation and regulation, Spokane’s move underscores the need for robust protections to ensure cryptocurrencies serve as a tool for empowerment rather than exploitation.