The St. Paul City Council voted 6-1 on Wednesday to ban cryptocurrency kiosks citywide, setting up a possible legal confrontation with machine operators who recently sued the city of Stillwater over a similar ban.
At least 32 of the ATM-like machines have proliferated in convenience stores and small shops across St. Paul, drawing scrutiny from police and others. The machines — which allow users to make cash contributions to cryptocurrency accounts and have dollars converted to Bitcoin — have been linked to 51 scam reports statewide, amounting to $700,000 in losses in Minnesota alone.
Council members Saura Jost and Cheniqua Johnson on Wednesday acknowledged they had little prior knowledge of the machines or the scams until Council President Rebecca Noecker invited law enforcement officials from suburban cities to make a presentation in May.
“The predatory nature of it … was something that was hard to ignore,” said Johnson, who was impressed by Forest Lake and Stillwater’s own findings around cryptocurrency scams, which often target elderly victims. Noecker noted the machines impose heavy mark-ups, inspiring seasoned cryptocurrency users to perform their deposits and other transactions online.
Stillwater banned the kiosks in April, drawing a lawsuit from Bitcoin Depot. In St. Paul, a representative of Bitcoin Depot delivered remarks at a public hearing last week but made no mention of possible legal action against the city.
Council Member Anika Bowie cast the sole dissenting vote against the ordinance, noting a citywide ban does nothing to prevent scammers from simply directing victims to a kiosk over the city’s borders.
“I honestly think this penalizes businesses … and just kind of relocates the issue,” Bowie said. “I do think it’s important that we raise awareness, and that was really good in terms of what came out of this.”