Cryptocurrency kiosks can look like ordinary ATMs, but people who deposit cash into them at the direction of a scammer may never get their money back.
Lansing city officials are considering new regulations for the machines after AARP Michigan raised concerns about scams targeting seniors and other residents.
The proposed ordinance would require businesses hosting cryptocurrency kiosks to register the machines, display warnings about potential fraud and provide a 24-hour customer service number.
Ryan Kost, Lansing City Council’s first ward representative, said AARP Michigan approached the council about the issue about six months ago, prompting officials to consider local regulations.
The machines can be confusing for people unfamiliar with cryptocurrency, Kost said, particularly when they are placed next to traditional ATMs.
“When they're sitting next to the ATM, it certainly looks like it's, you know, just another ATM,” Kost said.
Scams can be difficult to trace
Cryptocurrency kiosks allow customers to deposit cash and convert it into cryptocurrency, which can then be transferred to a digital wallet. Scammers may pressure victims to use the machines to pay bogus bills or address threats, making it difficult for victims to recover their money.
Kost said he did not have a confirmed count of how many people in Lansing have been scammed, but he believes some incidents may go unreported.
“I think that they probably happen more often than we think they do, and just never really get any, I guess, coverage, if you will,” Kost said.
The proposed rules would require businesses to register their machines with the city clerk’s office and renew that registration annually. The ordinance also would require a customer service number on each machine, so users have a way to contact the operator.
Kost said he hopes the state will consider broader regulations because the issue extends beyond Lansing.
Jackson takes a different approach
Jackson City Council voted unanimously Sept. 22 to ban cryptocurrency kiosks. The ordinance is scheduled to take effect Oct. 22, with existing machines required to be removed within 90 days after that date.
Lansing’s proposal would regulate the machines rather than prohibit them.
The Lansing City Council is scheduled to vote on the proposed ordinance Oct. 26. If approved, it would take effect 14 days later.