Concerns over scams lead to ban of crypto kiosks in city of Spokane

Citing the risk of the public getting scammed, the Spokane City Council voted Monday to ban cryptocurrency kiosks within city limits.

The kiosks, found in convenience stores and gas stations, look like ATMs but they do not dispense physical currency. Instead, they allow users to trade or purchase virtual currency.

According to the ordinance, which was approved unanimously, the kiosks are a “significant instrument” of financial fraud. In 2023, the FBI reported $5.6 billion lost from cryptocurrency kiosk-related scams across the country and $142 million lost in Washington state.

Spokane Police Department Detective Tim Schwering said he has dealt with many cases in which Spokane residents were cheated.

“They’re scamming people, saying that they need to move their money into cryptocurrency in order to protect it. And by the time the money is into the cryptocurrency, it’s already too late,” Schwering said.

Local officials have little ability to return the scammed funds once they are transferred overseas, he said.

Councilman Paul Dillon said Spokane is one of the first municipalities in the nation to ban the kiosks.

“This will ban future ones, as well as remove existing kiosks. We see a lot located in poor neighborhoods, convenience stores, grocery stores,” he said.

“There are lots of vulnerable populations that are being preyed upon by these types of machines, and so this is really making sure that we’re taking safeguards for folks in our community so that they don’t get preyed upon and lose a lot of their savings or cash in these machines,” Councilman Zack Zappone said.