SPOKANE, WA – The Spokane City Council is considering banning virtual currency kiosks amid a rise in scams that cost Washington state more than $141 million in 2023 alone.
According to Coinme and Coin ATM Radar, there are around 70 kiosks located around Spokane County, with roughly 50 inside city limits. Last December, the council asked the state to adopt daily transaction limits and fee guidelines, but the Legislature didn’t get around to it this year.
Councilmember Paul Dillon and Council President Betsy Wilkerson want to take action now in case the Legislature doesn’t next year. Their proposal, scheduled for a first reading on Monday night, would ban the kiosks and require the existing ones to be removed within 60 days.
“The Spokane Police Department has been leading outreach and regulatory efforts, reporting several scams daily, which resulted in three suicides,” according to the ordinance. “Spokane has limited ability under state and federal laws to regulate cryptocurrency transactions, but can regulate the placement and use of physical kiosks.”
According to the proposal, state law allows the city to pass regulations that preserve public health, morality and good order, allowing it to arrest and punish said violators.
Dillon told The Center Square that the ordinance has been through a legal review, and they plan to move forward. The FBI reported nearly $5.6 billion in losses nationwide in 2023 due to kiosk-aided scams, with almost $142 million from Washington state.
According to the FBI report, Washington ranked fifth behind California, Florida, Texas and New York for the number of complaints, and seventh for total losses, right behind New Jersey and Illinois.
Senior citizens accounted for the vast majority of kiosk scams and related losses. The Spokane County Sheriff’s Office deals with the issue frequently. According to news releases, scammers will call victims and ask them to deposit money in the kiosk before stealing it for themselves.
Typically, the criminals are posing as tech support or government officials, threatening jail time.
Stillwater, Minn., passed a similar measure in April to ban the kiosks. Coinflip and Bitcoin Depot testified against proposals at the state level in March. They said a $1,000 daily limit falls below a $2,000 suspicious activity report threshold and say only 2% of transactions are fraudulent.
“Kiosk transactions move quickly and can occur anywhere and, because of the speed of the transaction, the majority of such transactions are irrevocable,” according to Dillon’s proposal.
If approved in the coming weeks, violations would result in a Class 1 civil infraction, and the city may also revoke an operator’s business license.