Spokane becomes first in Washington state to ban crypto kiosks amid recent scams

(The Center Square) – The Spokane City Council banned virtual currency kiosks on Monday and directed operators to remove dozens around the city amid a rise in scams targeting residents.

Councilmember Paul Dillon proposed the measure after Stillwater, Minn., passed a ban in April, making it among the first nationwide. Several other areas in Minnesota are also considering the ban, but Spokane beat them to the punch on Monday, making it the first in Washington state.

The council passed the ban unanimously on Monday after Tim Schwering, a detective with the Spokane Police Department, raised the issue a while ago. Schwering said Monday that people use the kiosks to buy cryptocurrencies and transfer funds, which often end up in enemy hands.

“I’ve had a number of cases where this money that’s placed in there will end up in places like China, North Korea, Russia,” Schwering told the council. “Places that don’t have diplomatic relationships with the United States. What is happening is people are getting scammed.”

He said scammers often pose as someone from SPD or the Internal Revenue Service and tell their target to buy cryptocurrencies from the kiosk to protect their money. Sometimes scammers tell the victim they could face jail if they don’t follow through, often targeting senior citizens.

Once someone puts money in the machine, it’s gone. Schwering said the kiosks are all over the city and applauded Spokane for its new ban. The Federal Bureau of Investigation reported $5.6 billion in losses due to kiosk-aided scams in 2023, nearly $142 million from Washington state.

According to a news release, SPD will provide regular reports on whether the kiosk ban has led to a measurable impact on related crimes. The council asked the Legislature to adopt guidelines around the kiosks last December, but the proposals stalled before state lawmakers took action.

Dillon said Monday that many kiosks target low-income residents in less affluent neighborhoods. Lynn Kimball, executive director of Aging & Long Term Care of Eastern Washington, said the scams disproportionately target older adults and that the ban will have a significant impact.

According to the ordinance, operators must remove any kiosks within city limits over the next 60 days, or they could receive a civil infraction and lose their business license. Councilmember Jonathan Bingle said the ban even received praise from the Washington State Office of the Attorney General.

“This is a great step forward for the city,” Bingle said. “You guys are working on things that we had no idea were even a problem."