Banning Virtual Currency Kiosks is no Solution to Fraud

Bill Repasky, attorney at Frost Brown Todd, authored an article for Cointelegraph, "Banning Virtual Currency Kiosks Is No Solution to Fraud."

Repasky argues that blanket bans on crypto ATMs, often established in response to rising fraud, is a misguided approach that harms legitimate users while failing to prevent scammers. He explains that fraud involving virtual currency kiosks often exploits human vulnerabilities, not the technology itself, comparing such bans to "banning email to eliminate phishing attempts or prohibiting elderly people from buying gift cards to keep them from falling into the hands of scammers."

To address these risks more effectively, Repasky highlights the role of state regulators in shaping safer crypto infrastructure, pointing to proactive measures taken by cities like Grosse Pointe Farms, Michigan.

"[T]he town….preemptively put in place registration and warning requirements on crypto ATMs (even though there aren't any in the town yet), which the city council said would offer 'a little bit of help' and transparency for residents, especially those who might be unfamiliar with cryptocurrency or unaware of common scams," he adds.

Ultimately, Repasky recommends smarter interventions that avoid blanket bans to preserve access while protecting users.

"[C]oncerned regulators should encourage ATM operators to leverage proven fraud prevention techniques to interrupt fraudsters and protect prospective victims from making a mistake," he writes. "These tools offer a smarter approach, one that both protects consumers and preserves the exciting possibilities of cryptocurrency."