Sterling Heights adopted an initial step toward regulating cryptocurrency kiosks on Dec. 3, voting to introduce an ordinance that would require business operators and machine operators to obtain specialty virtual-currency licenses, permit annual inspections, display licensing on devices and keep transaction records.

The ordinance, presented by Police Captain Colleen Hopper, responds to what city officials described as a rise in scams tied to coin or cryptocurrency ATMs. Hopper said Michigan has about 648 cryptocurrency ATMs and that Sterling Heights alone has 27. She told the council police have 23 active cases since Jan. 1, 2025, and that documented losses to local residents total $542,000 so far this year.

"Once that money is submitted, it is gone," Hopper said during her presentation, urging the council to act to protect residents. Hopper outlined specific proposed requirements: a specialty license endorsement issued by the city clerk (if adopted, operators must obtain the license by March 31, 2026); an employee onsite at machine locations; a customer-service hotline; photo ID for transactions; daily transaction logs retained for 90 days; and clear, conspicuous disclosures of fees and a fraud warning that transactions are final. The ordinance would treat first-time users as "new customers" for up to 14 days and limit new-customer transactions to $1,000 per 24-hour period.

Council members questioned how the rules would be enforced and who would carry responsibility. City Attorney staff and police explained that licensing would apply to both the host business (for example, a convenience store) and the machine operator, with inspections and enforcement actions to be handled primarily by police and code enforcement. "We wanted the gas station owner to have skin in the game, so to speak, but also the operator to have to be available for the hotline call," one city attorney representative said.

Several council members urged accompanying public education focused on seniors, who police said are frequent targets. Councilmember Zarko recommended community-center or library programs; Councilmember Schmidt suggested the senior center as an initial outreach site. Councilmember Radke asked staff to send a letter to state legislators urging statewide action as well.

The vote at the meeting was to introduce the ordinance for formal consideration; the council did not finalize adoption that night. The next steps will include review of ordinance language, additional legal review and scheduling for future consideration or a public hearing before a final vote.

Provenance: topicintro SEG 1059, topfinish SEG 2110.

Speakers quoted: Captain Colleen Hopper (Police), Mark Vanderpool (City Manager), Councilmembers Radke, Zarko, Schmidt (Council members). Ending: The council introduced the ordinance and directed staff to proceed with drafting and outreach; a formal adoption vote will follow procedural review and additional public discussion.