Saint Paul committee hears accounts of fraud tied to cryptocurrency kiosks; members weigh ban, regulation, state action

Members of the Saint Paul Policy and Organizational Committee heard detailed testimony on cryptocurrency kiosks on not specified, as state and local officials, a victim and representatives from neighboring cities described how criminals use the machines to take victims' money and discussed local and state policy responses.

The session brought together Mike Carter, enforcement audit director at the Minnesota Department of Commerce; Detective Nathan Olstad of the Forest Lake Police Department; Stillwater Mayor Ted Kaczlawski and Stillwater Police Chief Bridal Mueller; and Tim Plunkett, a Saint Paul resident who described being targeted and losing money. Presenters described a pattern in which impersonation schemes, caller ID spoofing and QR-code workarounds lead victims to kiosks and result in rapid transfers of cash or cryptocurrency to fraudsters.

Why it matters: Committee members said the machines appear to disproportionately harm older and otherwise vulnerable residents, can produce large one-time cash withdrawals and create enforcement challenges for single cities. Speakers urged a combination of consumer education, stronger state rules and local regulatory tools to reduce harm.

Most of the presenters urged caution about local-only responses and highlighted limits in the current Minnesota rules. Carter summarized the state framework and its limits: “Those limits are $2,000 a day for a new customer,” he said, describing the 72-hour new-customer definition in Minnesota Statutes chapter 53B and the statute’s refund and recordkeeping requirements. He and other presenters said the new-customer rule creates a loophole exploited by fraudsters using QR codes that log victims into existing (fraud-linked) accounts, allowing large transfers that fall outside the $2,000 protection.

Forest Lake Detective Nathan Olstad laid out investigators’ experience tracing transactions and the practical problems victims face. “I had a victim … who reported within 12 hours … he had put almost $20,000 into a machine because he got the QR code,” Olstad said, describing how QR codes and preexisting accounts can nullify state protections. Olstad and others said the companies that operate kiosks often refunded only transaction fees, not full losses, even when victims met statutory criteria.

Stillwater officials described a different local response. Mayor Ted Kaczlawski said the city adopted an outright ban after consulting legal counsel and weighing enforcement capacity. “We made the news with it because we're doing an outright ban on these,” Kaczlawski said. Chief Bridal Mueller said law enforcement in Stillwater saw patterns of targeting of elderly residents and that businesses hosting kiosks often removed them once the city announced action.

A resident's account illustrated how scammers combine technical access and social pressure. Tim Plunkett described a caller who impersonated an Xfinity technician and later an official he said was from the Federal Trade Commission, used remote-access software on Plunkett’s devices and directed him to purchase cryptocurrency at kiosks. Plunkett said he removed remote access, sought help from vendors and filed reports with Saint Paul police, the FTC and the FBI. “I think I've been scammed,” Plunkett told the committee during his presentation.

Speakers and council members discussed policy tradeoffs. Forest Lake chose a zoning/registration approach that requires kiosk-hosting businesses to register and permits civil penalties, while Stillwater pursued a ban based on concerns about predatory placement and the city’s limited regulatory resources. Several members noted the risk of legal challenges and urged coordination with the attorney general's office and the Minnesota Department of Commerce. Olstad advised that other jurisdictions study Iowa and other states that have pursued litigation or enforcement actions against kiosk operators.

Committee members asked staff to research enforcement models, potential local ordinances and state legislative options. Multiple council members recommended pursuing parallel tracks: local regulation or bans where feasible, together with advocacy for state-level fixes to close statutory loopholes and limit kiosk fees.

The meeting closed with members asking staff to return with options and with a commitment to follow up with state partners and community organizations active on elder fraud and consumer protection.