Texas lawmakers are preparing a renewed push to regulate or potentially ban cryptocurrency kiosks after scammers used the machines to steal nearly $57 million from Texans last year — with elderly residents accounting for most of the victims — The Texas Tribune reported on Wednesday.

The legislative effort follows a sharp rise in fraud involving cryptocurrency ATMs, which law enforcement officials say have become a favored tool for criminals impersonating police officers, government agencies and banks to pressure victims into depositing cash that is quickly converted into untraceable digital currency.

State lawmakers from both parties have begun laying the groundwork for action during the 2027 legislative session after hearings highlighted the growing scope of the problem and the lack of state oversight over the estimated 4,000 crypto kiosks operating across Texas.

"We just need to get rid of them," GOP state Rep. Mitch Little said after hearing testimony from financial crime investigators who argued the machines have little legitimate use beyond facilitating fraud and money laundering.

The renewed scrutiny comes after nearly 1,200 Texans lost a combined $56.8 million through cryptocurrency kiosk scams last year, almost twice the amount reported in Florida, the state with the second-highest losses.

Victims described increasingly sophisticated schemes in which scammers impersonated sheriff's deputies, court officials or bank employees, often using realistic documents, spoofed phone numbers and personal information to convince targets they faced arrest or financial danger unless they immediately withdrew cash and deposited it into cryptocurrency kiosks.

One 72-year-old Austin woman narrowly avoided losing $5,000 after fraudsters posing as the Travis County Sheriff's Office convinced her she needed to post bail for allegedly missing jury duty.

She abandoned the transaction only after recognizing the machine was a Bitcoin kiosk rather than an official government payment terminal.

Others were not as fortunate. Victims interviewed by The Texas Tribune reported losses ranging from $5,000 to nearly $100,000, with none recovering their money after reporting the crimes to law enforcement.

Authorities say cryptocurrency kiosks accelerate scams by allowing criminals to move cash into cryptocurrency almost instantly before dispersing the funds across multiple digital wallets, making recovery nearly impossible.

The Texas Financial Crimes Intelligence Center estimates investigators have only 36 to 48 hours to recover stolen assets before they effectively disappear.

Texas currently has no statewide regulations governing cryptocurrency kiosks, even as 30 states have enacted laws regulating them and four states have banned the machines in recent months.

Legislation introduced during the 2025 session would have placed the kiosks under the authority of the Texas Department of Banking, but competing House and Senate proposals failed to reach Gov. Greg Abbott's desk.

Lawmakers now appear divided between imposing stricter regulations and banning the machines outright.

GOP state Rep. Cole Hefner said he or another legislator intends to introduce legislation next session prohibiting the kiosks altogether after meeting with financial crime investigators in June.

Little, however, cautioned against immediately banning the machines, arguing Texas traditionally favors market-based solutions but acknowledged the fraud problem is becoming increasingly difficult to ignore.

"I don't think we should just step in and ban things because we don't like them," Little said. "But it's pretty obvious we have a problem."

Consumer advocates say Texas has fallen behind other states in protecting residents, particularly older adults. The Texas Financial Crimes Intelligence Center estimates some 70% of kiosk users are over age 60.

Without state action, some local governments have begun acting independently. San Antonio recently approved an ordinance requiring warning signs on cryptocurrency kiosks explaining the risks of fraud, while other cities have expanded public education campaigns warning residents about the scams.

The issue has also drawn attention to kiosk operators themselves.

Bitcoin Depot, once the nation's largest cryptocurrency kiosk operator, filed for bankruptcy in May, citing increasing litigation and regulatory enforcement. The company had operated roughly 900 kiosks in Texas, its largest market.

Separately, Iowa's attorney general found that 98% of transactions through Bitcoin Depot kiosks in that state were linked to scams, prompting lawsuits against the company and another operator, CoinFlip.