SPOKANE VALLEY, Wash. — Spokane Valley City Council will consider a proposed ordinance to ban cryptocurrency ATMs as scammers increasingly use the machines to defraud residents of thousands of dollars.
The ordinance targets an estimated 20 cryptocurrency kiosks located throughout the city. Police report significant financial losses from scams involving these ATMs, including one recent case where a victim lost $300,000.
“The concern is just the fact that they’re used, being used as a vehicle by others to commit fraud,” said Kelly Konkright, Spokane Valley City Attorney.
Scammers typically pose as government officials, romantic interests or family members and convince victims to deposit cash into the cryptocurrency machines before sending the digital currency to the criminals. The transactions prove difficult to trace and nearly impossible to recover once completed.
“There’s anonymity. So persons who are perpetrating fraud using a cryptocurrency machine are able to conceal their identity because it’s not linked to bank accounts it’s linked to a virtual digital wallet. And so it’s much harder to track, transactions and identify those who are using it for fraudulent purposes,” Konkright said.
The proposed ban aims to eliminate this avenue for fraud as scams become more sophisticated and widespread. City officials hope removing the machines will make it harder for residents to fall victim to these schemes.
“The focus of this ordinance is to prevent kiosks from being in the city so that that avenue of fraud just isn’t present here in the city,” Konkright said.
Store owners who lease space to ATM companies would lose that revenue stream if the ordinance passes. However, some business owners interviewed off-camera indicated that removing the machines would not significantly impact their operations.
Those store owners also noting that typical users of these cryptocurrency ATMs tend to be seniors. FBI data shows that people aged 60 and older have suffered the greatest financial losses from cryptocurrency scams nationwide.
“We have received reports of people losing their retirement savings. I know that the impact on residents, regardless of the amount, is very large. It has a very negative impact on the victims of these fraudulent schemes,” Konkright said.
The City Council discussion tonight represents the first formal consideration of the ordinance. If approved during tonight’s meeting, the ban could take effect as soon as next week.
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