Forest Lake adopts ordinance to register cryptocurrency kiosks after local fraud reports

The Forest Lake City Council on April 14 approved an ordinance requiring businesses that host cryptocurrency kiosks to register the machines with the city and meet a set of consumer-protection and enforcement conditions.

City staff described the machines — ATM-like devices found in gas stations, grocery stores and pharmacies — as frequent vehicles for fraud. Amanda (city staff) told the council that kiosks typically charge a 20%–30% markup over online prices and that, locally, police records show roughly $300,000 in kiosk-related fraud in Forest Lake from 2023 through 2024.

The ordinance (Ordinance 750) requires the hosting business — the local gas station, grocery or pharmacy that allows a kiosk on its premises — to submit an application, pay a $2,000 annual registration fee, provide a copy of any state license held by the kiosk operator, and supply a lease or rental agreement showing the operator’s relationship with the host. The host must also provide a dedicated closed-circuit camera focused on the kiosk and make recorded footage available to the Forest Lake Police Department within 48 hours of request.

Amanda said the registration follows recent state action. "The Minnesota Legislature in the 2024 cycle did re-add some new legislation that requires kiosk operators to obtain a license with the Department of Commerce," she said, adding that the city ordinance complements those state rules. She also summarized how scammers commonly use kiosks to receive funds from victims, often impersonating law enforcement or investment officials and targeting older or vulnerable residents.

Forest Lake’s ordinance adopts a local enforcement threshold tied to substantiated fraud complaints: a kiosk operator will be ineligible to register in the city if the operator has more than two substantiated instances of kiosk-related fraud in the city within the prior six months, as determined by the Forest Lake Police Department’s review of reports. The ordinance requires the host to post a city‑provided warning sign about fraud and to cooperate with police compliance checks.

Police officials at the meeting supported the ordinance. Chief Pearson called it “a fantastic step in the right direction,” and the council acknowledged that neighboring cities are considering similar measures.

The council approved Ordinance 750 by voice vote. The council also approved a separate resolution authorizing summary publication of the ordinance so it can take effect in accordance with city procedures.

Forest Lake officials said the measure aims to reduce a steady stream of kiosk-related fraud while allowing operators that follow consumer‑protection rules to continue in business.

The ordinance packet includes three attachments describing registration materials and enforcement procedures; the council voted to adopt the ordinance as presented and to authorize summary publication of the ordinance.