Delaware and New Jersey Push to Ban Crypto ATMs as Fraud Losses Surge Across the U.S.

Lawmakers in two Mid-Atlantic states are taking direct aim at the row of Bitcoin ATMs tucked inside gas stations and corner stores, arguing these machines have become little more than automated gateways for fraudsters targeting everyday residents.

Delaware’s House Bill 441 advanced out of the House Economic Development Committee on June 9, 2026, setting the stage for a near-total ban on cryptocurrency kiosks. Across the border, New Jersey’s Senate Bill S2141 cleared the Senate Commerce Committee unanimously just a day earlier. Both measures reflect mounting anger over irreversible, high-fee transactions that scammers exploit with alarming success.

The Delaware bill, sponsored by Rep. Cyndie Romer (D) and Sen. Spiros Mantzavinos (D), would outlaw the installation, ownership, and operation of crypto kiosks statewide. Existing machines would have to go offline immediately and be physically removed within 90 days. It also blocks workarounds like cashier-assisted crypto purchases at retail counters.

Following the bill’s release from the House Economic Development Committee, Rep. Romer, who chairs the House Technology & Telecommunications Committee, didn’t mince words: “These kiosks reduce digital currency to a predatory cash grab.”

Delaware Attorney General Kathy Jennings called the machines “tailor-made to defraud consumers,” noting how scammers use social media and romance schemes to pressure victims into feeding cash into these terminals. Once the crypto is sent, recovery is nearly impossible.

Rising Fraud Toll Drives Action

Federal numbers paint a grim picture. In 2025, the FBI’s Internet Crime Complaint Center received over 13,400 complaints linked to crypto kiosks nationwide, with losses exceeding $388 million – a sharp jump from the previous year. In Delaware alone, crypto-related scams contributed to nearly $27 million in reported losses, with more than half involving victims over age 50.

AARP Delaware State Director Lucretia Young strongly endorsed the bill, highlighting how seniors are often told to “protect” their savings or help a fake relative by rushing to the nearest kiosk.

New Jersey is following a parallel path. Sen. Paul Moriarty (D-Gloucester), the lead sponsor of S2141, told the Commerce Committee the machines have “no legitimate purpose – none.” The bill prohibits businesses from owning, controlling, installing, or managing crypto ATMs, with strong backing from Senate Majority Leader M. Teresa Ruiz and others.

Not Anti-Crypto, But Anti-Exploitation

Supporters are careful to separate the kiosks from cryptocurrency itself. David J. Mench of the Delaware Bankers Association stated that backing the ban “is not a rejection of cryptocurrency… it’s a recognition that the public interest requires safeguards against channels that are disproportionately exploited for criminal activity.”

Legitimate crypto users have largely moved to regulated apps and exchanges with better security, lower fees, and proper oversight. The kiosk industry, meanwhile, faces headwinds, including recent financial troubles for major operators.

The broader crypto ATM industry is already facing operational challenges beyond fraud concerns. Earlier this year, major operator Bitcoin Depot drew attention after filing for Chapter 11 bankruptcy protection, highlighting the growing regulatory and financial pressures surrounding kiosk-based crypto services.

If passed, Delaware’s HB 441 would treat violations as unlawful practices under consumer protection laws, allowing fines up to $10,000, refunds to victims, and private lawsuits. New Jersey’s measure carries similar tough penalties for repeat offenders.

Similar concerns are emerging beyond the United States. Canadian authorities have also been reviewing stricter measures on crypto ATMs after a rise in fraud complaints linked to kiosk transactions, reflecting a wider international trend toward tighter oversight of these machines.

Part of a Growing National Shift

These efforts put Delaware and New Jersey on track to join around 30 other states that have already imposed restrictions or outright bans on crypto kiosks since 2023, including Tennessee and Indiana. The bills now head to their respective full chambers for further debate.

The debate also arrives as lawmakers continue to wrestle with how quickly cryptocurrency regulations should evolve. Recent discussions in Washington have highlighted differing views on balancing consumer protection with innovation, underscoring the broader policy challenges facing the digital asset sector.

As cryptocurrency edges further into mainstream finance, regulators are drawing a hard line at physical cash-in machines that operate with minimal oversight and maximum risk for ordinary people. Whether more states follow this aggressive approach may determine how accessible – and how safe – crypto on-ramps remain at the street level in the years ahead.