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Woodbury council tables ordinance to regulate cryptocurrency kiosks after debate over fees and access
Summary
City staff proposed rules to reduce fraud at cryptocurrency kiosks — requiring employee‑controlled access, registration, cameras and fraud warnings — but the council voted to table the ordinance for a workshop after members raised concerns about a $3,500 fee, business impacts and overlap with state law.
Woodbury council members on Feb. 25 tabled a proposed ordinance that would restrict public access to cryptocurrency kiosks and require annual registration, employee‑controlled access, customer fraud warnings, 30‑day camera retention and compliance inspections.
Assistant Police Chief Omar Maklad, presenting the proposal, said staff drafted the ordinance to fill gaps in state law — which, he said, does not regulate kiosk placement or local enforcement tools — and to reduce what investigators estimate are more than $200,000 in annual losses to Woodbury residents from kiosk‑related fraud. "This ordinance addresses those gaps," Maklad said, describing the measures as "balanced and legally defensible." He told the council the city has seen more than two dozen investigations a year tied to kiosks and that victims are disproportionately older adults.
Several council members praised the goal of protecting seniors and preventing fraud but said they were concerned the ordinance's operational requirements and the proposed $3,500 annual registration fee would make kiosks effectively inaccessible in many businesses. One council member called the package "so onerous that this is effectively a ban," arguing the fee represents about half of what a kiosk operator collects and that requiring kiosks to be behind staffed counters or in locked enclosures could force businesses to remodel.
Supporters of the rules said the operational limits create needed "pause points" where employees could intervene when a customer is being scammed, and added that cameras and staff review of warnings help investigations and deterrence. "A lot of the tactics that the scammers use is they keep community members on the phone while they instruct them how to insert cash and create a crypto wallet," Maklad said. "This would allow us a pause point to intervene."
Council members asked staff for more detail on fees, the universe and locations of existing kiosks (staff estimated about 10, mostly at gas stations) and whether the city should study proximity limits near senior housing. After extended discussion about local authority, fairness to businesses and whether the state will act, the council voted to table the ordinance and refer it to a workshop for additional vetting and a review of state activity.
Next steps: staff will return with more information (a map/list of kiosk locations, refined fee proposals and recommendations on proximity limits), and the council expects to revisit the topic in a workshop within the coming months.
