Minnesota Bans Crypto Kiosks, Opens Path for Regulated Crypto Custody

On August 1, 2026, Minnesota made significant changes to its laws governing cryptocurrency transactions. The state banned crypto kiosks, also known as ATM-style machines, which were widely used for scams. At the same time, a new law allowed banks and credit unions in Minnesota to hold cryptocurrency on behalf of their customers.

The move aims to prevent scammers from using these kiosks to commit fraud. The usual tactic involved a scammer contacting an individual, claiming their bank account was hacked or they owed back taxes, and then instructing them to rush to a nearby kiosk to convert cash into cryptocurrency. This would often involve high fees.

The ban on crypto kiosks is part of a broader effort by the state to regulate cryptocurrency transactions in a way that protects consumers while also promoting adoption and compliance. By allowing banks and credit unions to custody crypto, Minnesota hopes to create a safer and more regulated environment for individuals looking to buy or hold cryptocurrency.