Shutterstock image
STERLING HEIGHTS — The Sterling Heights City Council is taking steps to make sure consumers are protected against virtual currency scams — a move the city said is happening just in time for the holidays.
At its Dec. 2 meeting, council members heard the introduction of a new ordinance aimed at adding new licensing and operational regulations for virtual currency machines, including cryptocurrency kiosks and bitcoin ATMs.
Though the machines offer users an easy and often anonymous way to convert cash into digital assets, they have also become a fast-growing target for scam artists posing as government officials, tech support or distressed family members, a press release from the city states.
“These scams typically begin with an unsolicited message or call designed to create panic, pressuring victims into withdrawing cash and depositing it into a cryptocurrency ATM. Once converted, the funds are often irretrievable,” the press release states.
According to the release, the city currently has 27 machines operating within its borders. The Sterling Heights Police Department has investigated 23 fraud cases tied directly to the machines, with losses totaling more than $542,000.
Sterling Heights Police Capt. Colleen Hopper, who introduced the ordinance at the meeting, said she was told this is the highest number of machines in any of the surrounding areas.
“The FBI notified me that this is the highest amount in any community in this area, Macomb County or Oakland County, and because of that we have more scams than any other city or county around us,” she said.
This led to the department forming a crypto task force to combat the issue. Additionally, through a collaboration between city administration, the Police Department and the city attorney’s office, a new ordinance was created aimed at creating a balanced framework that preserves access to the machines while enhancing protection and public safety.
The ordinance creates several new provisions, including the requirement to obtain a specialty license endorsement through the city clerk’s office, which must be done by March 31, 2026. Machines must also require a photo ID for transactions, display fraud warnings and disclosures, produce receipts and maintain a customer service hotline. Additionally, first-time users will face transaction limits of $1,000 in a 24-hour period to reduce risks.
They must also allow the city to make yearly inspections of the machines and display a license on the machine.
Hopper said the approach is focused on protecting victims, since most of the perpetrators of cryptocurrency scams are overseas.
“We want to prevent our seniors and our residents from falling victim to these scams. We believe this ordinance will help do that,” she said.
According to City Attorney Marc Kaszubkski, the ordinance would be enforced through regular inspections and renewal of licenses.
“To get licensed they have to come into compliance with what we’re asking,” he said.
Councilman Michael Radtke Jr. said he considered the ordinance to be a good idea, even though the transaction limits might create “roadblocks” for residents.
“Any kind of regulatory regime creates roadblocks, but here I think the roadblocks make a heck of a lot of sense,” he said. “If you’re a new customer putting thousands of dollars into a machine, I’m going to be asking you why.”
Councilwoman Maria Schmidt also said she was in favor of the ordinance.
“There’s some really bad people out there doing some really sick things, and they do target the seniors,” she said. “Whatever we can do to help minimize that, I’m all for it.”
Mayor Pro Tem Barbara Ziarko said she was in favor of the ordinance but suggested having some form of education available for the residents.
“You hear it on the news all the time. You can tell people over and over again that it’s a scam, but they still get involved for whatever reason, and that’s why I think the education on it is really important,” she said.
The City Council voted unanimously to move forward with the ordinance.
You May Also Be Interested In
C&G Newspapers