Delaware and New Jersey Advance Bills to Ban Crypto ATMs in US

The U.S. states of Delaware and New Jersey have taken significant steps towards approving legislation that would comprehensively ban the installation and operation of cryptocurrency ATMs. These moves are driven by concerns over a surge in fraud cases, particularly targeting elderly individuals, and underscore a broader regulatory trend across the nation aimed at enhancing consumer protection.

In Delaware, the House Economic Committee advanced House Bill 441 (HB 441) to the full chamber. This bill would prohibit the ownership, installation, or operation of cryptocurrency kiosks within the state. It also seeks to ban fiat-to-crypto sales that mimic ATM functionality and mandates the removal of existing machines within 90 days of the law's enactment. Violations could incur penalties of up to $10,000. Representative Cyndie Romer, a sponsor of the bill, characterized crypto ATMs as a “predatory cash grab,” citing their significantly higher transaction fees—which can reach upwards of 20% compared to 0.4%-1% on online exchanges—and their prevalent use in scams.

Neighboring New Jersey's Senate Commerce Committee unanimously voted to send its bill, Senate Bill 2141 (S2141), to the full Senate floor. This legislation would prohibit the ownership, control, installation, management, or sale of crypto ATMs. Penalties for violations would be up to $10,000 for a first offense and up to $20,000 for subsequent offenses. Senator Paul Moriarty, a primary sponsor of the bill, stated his belief that there is “no legitimate purpose” for these machines and that operators profit from the suffering of victims.

Data from the Federal Bureau of Investigation (FBI) highlights the scale of fraud associated with crypto ATMs. The FBI’s Internet Crime Complaint Center (IC3) reported nearly 13,500 complaints related to crypto ATMs in 2025, resulting in over $388 million in losses. These figures represent a 23% increase in complaints and a 58% rise in losses compared to 2024. More than half of these losses were attributed to individuals aged over 50, emphasizing significant protection gaps for older investors.

These legislative actions in Delaware and New Jersey are part of a broader regulatory crackdown on crypto ATMs across the United States. Indiana, Tennessee, and Minnesota have already enacted total bans on these machines. While some cities have also implemented bans, other states like Arizona and California have imposed transaction value caps. This increasing regulatory pressure has impacted operators, with Bitcoin Depot, once a leading crypto ATM provider, filing for Chapter 11 bankruptcy. Crypto ATM operators, however, maintain they are not responsible for third-party scams and have implemented on-screen warnings and transaction limits.

In the broader economic and political context, such regulations reflect growing scrutiny over consumer protections, money-laundering risks, and the legitimacy of crypto service points beyond traditional exchanges. Regulators aim to prevent vulnerable individuals, often seniors, from being coerced into transferring funds via these machines through scams such as government impersonation, tech support fraud, or investment schemes. These legislative proposals signal an expanding pattern of state-level risk mitigation concerning unregulated crypto access points.

Analysts and market observers anticipate that more states may take strong action against such machines as fraud losses continue to climb. Industry groups are seeking to collaborate with policymakers to establish a regulatory framework that both maintains access to cryptocurrency while effectively curbing fraudulent activities. These developments underscore the critical importance of consumer safety and legal compliance within the cryptocurrency markets, shaping the future regulatory landscape.