Texas Crypto Kiosk Scams Hit $57M; Lawmakers Consider Outright Ban
In brief
- Texas residents lost $56.8 million to crypto kiosks in 2025, more than any other state.
- AI-generated police impersonation calls trick victims into withdrawing cash and feeding machines.
- Three states already banned crypto kiosks; Texas lawmakers hint at legislation going beyond regulation.
How the Scams Work
Scammers persuade victims to withdraw money from bank accounts and feed it into machines scattered across gas stations and convenience stores. Texas has approximately 4,000 such kiosks operating statewide. AI-generated impersonation of police and state agencies is making the initial approach calls more convincing.
Once the cash enters a machine, recovery becomes nearly impossible. Funds typically go to an unhosted wallet, then to a mixer, according to Jesse Saucillo, deputy commissioner at the Texas Department of Banking. The money vanishes into a system designed to obscure its trail.
State-Level Responses
Approximately 30 states have enacted legislation relating to cryptocurrency kiosks since 2023. The responses vary. South Dakota caps transactions at $1,000 a day and $10,000 a month and requires full refunds for fraud victims. Wisconsin and Virginia have adopted similar caps.
But three states have gone further. Indiana banned the machines outright in March, the first state to do so, under a law that lets the attorney general sue both operators and the shops hosting them. Nearly 900 kiosks were running in Indiana when the governor signed it. Tennessee and Minnesota have since followed.
Maine's regulator took a different route, securing a $1.9 million settlement from Bitcoin Depot to reimburse victims.
Texas Signals a Harder Line
Rep. Cole Hefner, chair of the House Committee on Homeland Security, Public Safety and Veterans' Affairs, signaled Texas isn't content with regulation alone. He said the state would look at "doing more than regulating them" and hinted at a forthcoming bill.
Rep. AJ Louderback was blunt about the threat. "In my career, I've never seen a more efficient, cleaner way to steal money," he said during committee testimony.
The urgency reflects not just domestic fraud but alleged international networks. Kelley Currie, an Atlantic Council fellow, told the committee that Interpol now treats scamming as an industry comparable to drug and human trafficking. She alleged that kiosks in gas stations "are run by Chinese money launderers." The Justice Department has charged Chinese nationals over crypto fraud operations in Southeast Asia and prosecuted Chinese money laundering networks moving scam proceeds, though it has not stated that Chinese groups generally operate kiosks.
