Texas lawmakers weigh ban after $56.8M crypto kiosk losses

Texas accounted for $56.8 million in reported losses to cryptocurrency kiosks in 2025, the largest total of any state, according to FBI complaint data presented to a legislative committee. The bureau logged 1,179 complaints from Texas out of 13,460 complaints nationally, and reported total losses tied to kiosks rose 58% to $389 million nationwide.

Kiosks convert cash into cryptocurrency and are commonly placed in gas stations and convenience stores. Scammers contact victims, often impersonating officials or using automated tools, persuade them to withdraw funds, and instruct them to feed cash into the machines. Once the machine converts the cash, the funds typically move into unhosted digital wallets and into mixing services, making recovery difficult.

At a hearing of the Texas House Committee on Homeland Security, Public Safety and Veterans’ Affairs, Jesse Saucillo, deputy commissioner at the Texas Department of Banking, described the flow of funds after conversion and said recovery is unlikely once money reaches an unhosted wallet and a mixer. He added that scammers are increasingly using AI-generated impersonations of police and state agencies to make the calls more convincing.

Representative AJ Louderback described the kiosks as an efficient method for stealing money. Kelley Currie, an Atlantic Council fellow, told the committee that international law enforcement treats scamming as an organized industry and warned that some kiosk activity is tied to overseas money laundering networks. The Justice Department has charged Chinese nationals in connection with crypto fraud compounds in Southeast Asia and pursued networks that moved scam proceeds, while federal officials have not concluded those groups generally operate kiosks.

Committee chair Rep. Cole Hefner signaled lawmakers will consider strong action in Texas and suggested legislation could be straightforward and far-reaching. He told colleagues he had a specific proposal in mind and indicated Texas might go beyond standard regulation.

Since 2023, about 30 states have adopted laws or rules addressing crypto kiosks. Indiana was the first state to ban the machines outright, giving its attorney general authority to sue operators and host businesses. Tennessee and Minnesota have also enacted bans. Other states have limited transaction sizes, required refunds for fraud victims, or secured reimbursement agreements from operators.

Lawmakers did not vote on legislation at the hearing. Any Texas proposal would join a range of state responses that include outright bans, transaction caps, operator oversight and victim reimbursement measures. Regulators and advocates at the hearing urged clearer rules and faster remedies for people who lose money to kiosk-related scams.