One Iowa bill can save consumers from the 'scourge' of cryptocurrency scams
Iowans lose millions through fraudulent ATM transactions
“Crypto is a scourge. … Every single crime you can conceive of is easier to do now because of crypto, especially ransomware, human sex trafficking, sanctions evasion, money laundering.”
— John Reed Stark, former chief of the SEC's Office of Internet Enforcement, in an interview with “60 Minutes” in December
You can let that quote sink in as you consider how President Trump is deregulating the industry and promoting crypto as his personal coin of the realm. Meanwhile, I’ll focus on some promising news: Iowa is fighting one form of crypto fraud.
In its final days of the 2025 session, the Iowa House passed a bill regulating operators of digital financial asset transaction kiosks, also known as cryptocurrency ATMs. The Senate passed the bill in March, and it now goes to the governor.
The ATMs may look like traditional cash machines, but instead they allow consumers to purchase Bitcoin or other cryptocurrencies. Scammers often trick targets into going to the ATMs and sending money directly to the perpetrator.
Once sent, that money is gone. In most cases, authorities cannot pursue charges or recover funds because the perpetrators are overseas or cannot be tracked.
In Des Moines alone, consumers have reported more than $1.09 million in fraud losses at cryptocurrency ATMs from January 2023 to March 2025, according to Des Moines Police Department.
The Senate bill lays out some of the cryptocurrency ATM scams, including claims of a frozen bank account or credit card, identity theft or job offers in exchange for payment, requests for payment to government agencies or companies, and offers to purchase tickets for lotteries and sweepstakes.
The bill does the following for consumers:
Provides a refund if they were fraudulently induced to engage in a transaction, and have contacted the ATM operator and a law enforcement agency in 90 days to report the fraud and submit proof, such as a police report.
Limits any deposits or withdrawals to $1,000 per day. The operator also cannot accept or dispense more than $10,000 over a 30-day period from a new customer.
Restricts maximum charges to $5, or 15% of the dollar equivalent of the transaction.
The bill also requires operators to:
Give a disclosure to consumers that includes several warnings, including these phrases: “Consumer fraud often starts with contact from a stranger who is initiating a dishonest scheme” and “If you believe you are being scammed, call your local law enforcement.”
Give consumers a receipt, which includes contact information for the operator, the exchange rate, charges, and other information.
Take reasonable steps to prevent fraud, including using blockchain analytics software to prevent illicit transfers.
The bill gives the attorney general the authority to sue an operator for violations and seek civil penalties of up to $100,000.
In February, Iowa Attorney General Brenna Bird announced lawsuits against Bitcoin Depot and Coinflip, the largest operators of cryptocurrency ATMs in Iowa. The office’s investigation revealed that hundreds of Iowans sent more than $20 million through Bitcoin Depot and CoinFlip ATMs in a less than 3-year period.
Those moves are praiseworthy, given that consumer protection has not been one of Bird’s priorities.
Thanks also to Sen. Charlie McClintock, R-Alburnett, and other lawmakers for working with law enforcement and prosecutors to craft the ATM legislation.
AARP has also done great work on warning consumers of the risks and lack of regulation around virtual money.
The warning signs of corruption and fraud are everywhere, if we pay heed.
UPDATE: In the final hours of the session, Iowa lawmakers finally passed a compromise on spending opioid settlement money.
Sen. Janice Weiner was among the Democrats criticizing lawmakers’ delay in crafting a better way to distribute $56 million – and more to come.
"It's their (Iowans') futures and their kids' futures, and they deserve a good, clean process, which we could have done," Weiner said. "We've had 122 days. I don't wish on anyone the feeling of waking up every day wondering if it's going to be the day you find out your child's died of an overdose, and then trying to figure out how you explain that to your grandchild."
The irony is the Legislature took away the AG office’s authority to spend the funds in 2022, and then gave part of it back the night before the session ended. Read more about the back story: Iowans die as lawmakers dawdle on plan to spend opioid settlement money
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Another great column, Lynn.