Council holds first reading of ordinance to license virtual-currency kiosks amid fraud concerns

Port Huron councilors held a first reading May 26 of an ordinance to license virtual‑currency kiosks and require consumer safeguards after police described a pattern of scams that use kiosks to launder proceeds.

Police Chief Carrian told the council that fraudsters often use pop‑up messages and phone calls to convince victims to withdraw cash and deposit it at Bitcoin kiosks; once deposited, the transfers are irreversible. Chief Carrian said the city has seen roughly $600,000 in fraud reports over the past year and cited three cases totaling about $60,000 tied to kiosk transactions.

Key elements discussed during the first reading include a $1,000 initial‑deposit cap for new kiosk accounts, a $5,000 daily deposit limit, mandatory fraud/scam warnings during transactions and a local licensing requirement so the city has contact information if investigators need to act quickly. "The problem with these kiosk ... is once you put that money, it's irreversible," the chief said.

Enforcement would rely on annual licensing through the city clerk and detective-bureau checks to verify required postings and contact information; staff described the approach as following an ordinance recently adopted by Sterling Heights. Council members expressed support for being proactive rather than waiting for state legislation.

Because this was a first reading, the ordinance was not adopted at the meeting; council took a preliminary roll call in support of moving the ordinance forward for additional consideration.