Police warn crypto kiosks are a tool for scammers; council asks staff to explore ordinance

Lieutenant Adrian Montelongo, the city’s investigations commander, told the South Jordan City Council study session that cryptocurrency kiosks (often called crypto ATMs) have been used repeatedly by scammers to convert victims’ cash into cryptocurrency. Montelongo said the kiosks allow purchases and sales of crypto, sometimes without identification, and can charge very high fees.

Montelongo said the department has identified five kiosks located in South Jordan and separated kiosk-related incidents into two groups: victims who were scammed at kiosks inside the city (about $110,000 total over 15 months, averaging roughly $18,000 per case) and residents who were lured to kiosks outside the city (about $122,000 in reported losses). He told the council that some individual incidents reported losses far larger — including a case involving roughly $2,000,000 — and that elderly residents are disproportionately targeted.

The presentation described several common scam patterns — customer‑support impersonations, jury‑duty or federal‑agency impersonations that pressure victims to pay in cryptocurrency, malware/ransom tactics, and fraudulent investment platforms — and explained why kiosks complicate investigations: many kiosks do not collect consistent identification data, and once funds leave the country tracing and recovery become difficult.

Montelongo highlighted two regulatory changes from recent state legislation effective May 6: per‑transaction caps on kiosk withdrawals (the first three days limited to $2,000 per person, rising to $5,000 per calendar day thereafter) and limits on machine fees (Montelongo cited a previous 20–40% fee range and said the law places a much lower cap). He said the Department of Commerce is the agency identified so far to oversee compliance and that local staff were following up to learn how compliance and verification will be enforced.

Council members and the chief discussed local options. Several council members said banning kiosks within city limits is a plausible local step (citing Layton’s approach and recent actions in other states), while others asked about legal risks and enforcement burdens. Montelongo and the chief said seizures of kiosks are rarely effective and that the department is instead pursuing a mix of enforcement, victim education, partnerships with the state attorney general’s office for blockchain tracing tools, and community outreach aimed at older adults.

The council directed staff and police to return with options — from an ordinance banning kiosks to middle‑ground approaches that enhance disclosures, enforcement tools, or targeted outreach — and to coordinate with other cities and the Department of Commerce as details on implementation emerge.