20 Massachusetts communities ban crypto kiosks as state mulls wider crackdown

Two of the three senators on the chamber’s negotiating team say they support it.

“Scammers are using cryptocurrency ATMs to target our most vulnerable community members and draining them of their hard-earned savings,” said Senator Barry Finegold, an Andover Democrat and the Senate chair of the Committee on Economic Development and Emerging Technologies. Senator Peter Durant, a Republican and self-described supporter of cryptocurrency, also said he would support a ban.

Senator Michael Rodrigues, the chamber’s budget chief and the other Democrat on the Senate’s three-member panel, did not respond to requests for comment.

But none of the three House members on the committee would say where they stand. Representative Michael Soter, a Republican, declined to comment. Democratic Representatives Carole Fiola and Aaron Michlewitz, the House budget chair, did not respond to requests for comment.

The House has been here before. A narrower bill last year that would cap the amount of money a person can deposit each day, and would require some victims to be refunded their money, did not advance.

Kiosk owners have argued that regulations short of a ban could address the problem, like requiring refunds for fraud victims. A strict ban, they said, carries its own cost.

“Banning crypto kiosks won’t stop fraud. Instead, it pushes scammers toward channels with fewer safeguards,” said a spokesperson for Coinflip, one of the largest kiosks operators still in business.

But Sonia, the Beverly councilor, called the machines a “scam-factory” and said that he doesn’t hear about many legitimate customers using them.

“They are a great tool — if you are a scammer,” he said.

Beverly has had multiple cases of crypto ATM fraud. One 70-year-old local woman lost $120,000 at crypto kiosks over four years by driving across the bridge to Salem to make the deposits, Sonia said. He expects a ban to come up for a vote this fall, assuming the state doesn’t act first.

Easthampton is also moving to ban the machines, according to Councilor Felicia Jadczak, who filed an ordinance in late May. She is hoping that by passing a ban locally, other nearby towns may feel compelled to act.

“My hope would be that if something like this would pass, then the surrounding cities and towns would follow our lead,” she said.

Local officials have their own doubts about how much a town-by-town approach can accomplish.

Michaela Spagone, a town councilor in Bridgewater, said the key to solving the issue is state regulation.

“This is not just a local issue,” she told the Globe in an email statement. “It is a state-wide issue which garners the need for state-wide protection.” Bridgewater is not currently considering a ban, Spagone said, though she is open to the idea.

Bridgewater had its own major kiosk case back in February 2023, when a woman there gave $44,000 to a man posing as a federal cybersecurity investigator. She carried her cash to a Bitcoin Depot kiosk in East Taunton and a Coinhub machine in West Bridgewater, scanning QR codes texted from a burner number.

Unusually, an FBI agent managed to trace the deposits through the blockchain to an account from Kolkata, India.

News accounts in India reported that investigators found the group behind the scam by following a food delivery driver to their door. Eight men were arrested that December, charged with cheating, criminal breach of trust, and offenses under India’s Information Technology Act, according to local police reports.

Scooty Nickerson can be reached at scooty.nickerson@globe.com.