Albuquerque bans cryptocurrency ATMs and requires removal within 45 days

The city of Albuquerque completely bans cryptocurrency ATMs, with a 45-day deadline for removal

On Wednesday, the Albuquerque City Council unanimously passed a new ordinance formally implementing a city-wide ban on cryptocurrency automated teller machines (ATMs). The new regulation not only prohibits machine operators from operating such devices, but also prohibits virtual currency transactions assisted by cashiers, aiming to crack down on both machine operators and merchants that provide these self-service terminal venues.

Set removal deadline to deal with fraud risk

City officials said operators and retailers in Albuquerque that hold cryptocurrency ATMs must remove the equipment within 45 days of receiving the notice. The move stems from growing public concerns about such self-service terminals, especially the fraud and fraud issues they raise, which are particularly serious in vulnerable communities.

City Councilman Fibel Cohen stressed the need for urgent action, pointing out that federal level regulatory measures failed to protect local residents in a timely manner. "We can't sit back and wait for federal regulators to resolve this crisis while our residents continue to suffer abuse in the daily lives of our community." Fibel Cohen said.

Despite the ban, individuals in the city of Albuquerque can still own, mine and transfer cryptocurrencies through online exchanges or personal wallets. The restriction only applies to physical self-service terminals and face-to-face cash register services that facilitate direct crypto transactions.

Nations-wide campaign to clean up crypto ATMs

The city of Albuquerque's decision echoes similar restrictions implemented in multiple U.S. states. Indiana took the lead in issuing a statewide ban in March; Tennessee implemented the ban in July; and Minnesota's spring ban took effect in August. In addition, Delaware has advanced legislation, New Jersey is reviewing bills, and Texas lawmakers are debating their respective proposals. The background of Texas's move is reports that residents have lost as much as $57 million due to self-service terminal fraud.

Some U.S. legal agencies cited the high fraud rate as a reason for taking the above actions. In a typical case, the Washington, D.C. Attorney General filed a lawsuit against AthenaBitcoin, and the investigation found that 93% of the deposits in seven urban self-service terminals set up by the company in more than five months originated from fraudulent activity, with the main victims being elderly people. AthenaBitcoin denies the accusation.

As of 2024, the FBI has recorded nearly 11,000 fraud complaints related to encrypted self-service terminals, with losses exceeding US$246 million.

Location Cryptocurrency ATM Ban Status Effective date of the ban Indiana Statewide ban March 2024 Tennessee Statewide ban July 2024 Minnesota Statewide Ban August 2024 Delaware Bill has been advanced In progress New Jersey Bill under discussion In progress Texas Ban under discussion In progress Albuquerque, New Mexico City-wide ban June 2024

Impact on carriers and industries

Intensifying federal and local restrictions have dealt a major blow to the U.S. cryptocurrency ATM industry. Bitcoin Depot was once the largest Bitcoin ATM provider in the United States and filed for bankruptcy protection in May 2024. The Atlanta-based company operated more than 9,700 self-service terminals before shutting down the network. CEO Alex Holmes blamed the closure on stricter trading limits and an outright ban in some regions, which he said made the company's business model unsustainable.

Bitcoin Depot, which was once listed on NASDAQ, once operated thousands of machines in multiple states across the United States. Before the collapse, the company faced increasing compliance costs and tightening regulatory pressure.

Part of the bleak outlook for the industry is related to consumer security concerns, as shown by a growing number of reports of cryptocurrency ATM-linked scams. Thales, a local official in Albuquerque, estimates that fraud accounts for a large proportion of transactions at these self-service terminals. Although the number is high, national data shows that fraud is widespread in the industry.

Background: Bitcoin Depot

Bitcoin Depot was established in 2016 and is headquartered in Atlanta. It was the largest cryptocurrency ATM operator in North America until it went bankrupt. The company provides users with a way to buy and sell cryptocurrencies with cash through physical self-service terminals, allowing users to bypass traditional banking channels to obtain digital assets.

Bitcoin Depot's CEO attributed the company's bankruptcy to "increasingly stringent compliance obligations, transaction limits, and blanket restrictions or bans in some jurisdictions."