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In seconds, her financial security vanished behind a screen inside a gas station.
Thousands of dollars <a href="https://xpertsstudio.com/jpm-coin-deposit-token-goes-live-on-ethereum/” title=”JPM Coin deposit token goes live on Ethereum”>deposited into a cryptocurrency ATM, in what one Johnston County woman thought was a payment to law enforcement for her safe release. But when the callers – impersonating local law enforcement – on the other end of the line requested an additional $4,000, she told them she simply didn’t have the money.
That’s when the call dropped, and she realized she had been depleted of what she says was the entirety of her savings.
“I just set up an appointment with a counselor, so I’d have somebody to talk to, because it’s really hurt me financially and hurt me mentally.”
This victim, who wished to share her story with WRAL but not to be identified, is among thousands of victims across the country taken advantage of show a man recently lost more than $30,000 – which was described as ‘almost all’ of his savings – to a cryptocurrency machine
The machines – which upon first glance resemble regular ATMs – convert deposited cash into cryptocurrency investments. The transactions are virtually instant, difficult to trace and can be difficult to reverse.
Rise of cryptocurrency crimes, and how kiosks can play a role
Internet crimes facilitated through cryptocurrency kiosks are rising, following similar trends with general cryptocurrency related crimes.
The Federal Bureau of Investigation (FBI) began publicly reporting cryptocurrency kiosk metrics as of 2023. That year, the FBI received 5,500 complaints related to cryptocurrency kiosks, with losses of more than $189 million. Those numbers jumped in 2025, with the agency reporting 13,460 complaints totaling $389 million in victim losses.
“Fraud losses at BTMs [Bitcoin ATMs] are skyrocketing, increasing nearly tenfold from 2020 to 2023,” according to data cited from the Federal Trade Commission’s (FTC) Consumer Sentinel Network.
States are upping regulations, oversight over crypto ATMs. How far will North Carolina go?
Many states are enacting tighter consumer regulations around cryptocurrency kiosks, including several who have imposed some kind of ban altogether.
This year, North Carolina state lawmakers approved several regulatory changes to the Bitcoin ATM (BTM) industry by passing House Bill 920, introduced by State Rep. Neal Jackson (R).
“HB920 aims to protect North Carolinians from fraud through appropriate regulatory oversight while preserving our citizens ability to manage their finances. As technology advances, this legislation embraces innovation while ensuring consumers have the protections they deserve,” says Rep. Jackson
Some of the bill’s language includes:
- Requiring licenses for all kiosk operators under the Money Transmissions Act.
- Placing operators under the supervision of the Commissioner of Banks.
- Requiring fraud warnings and transaction receipts for every transaction.
- Requiring compliance and consumer protection officers that are always available.
It stipulates that kiosk operators shall refund the “full dollar amount deposited” under certain conditions, including when someone reports a “fraudulent” transmission within 30 days. In an effort to reduce fraud, the bill also seeks to place limitations on transaction amounts, capping new customers at $2,000 daily for the first 30 days, and after that, at $5,000.
North Carolina Attorney General Jeff Jackson believes the new customer limit may be the bill’s most significant addition to protecting consumers. Although the bill’s changes go into effect in 2027, Jackson questions – based on the level of fraud cases he’s seen from this technology – if there is a legitimate reason to have any in the state in the first place.
“We don’t think there is any legitimate use for these devices. They are overwhelmingly used for fraud. If you want to invest in Bitcoin, you can do that without paying the 12% overhead. You don’t have to do that through a gas station. If you want to send money to somebody, you can do that through a bank. There is no reason to go to one of these machines,” he told WRAL.
David Tente, the executive director of the ATM Industry Association, pushed back on Attorney General Jackson’s assessment of how frequently the kiosks are used to facilitate crimes.
“Only a tiny percentage of those transactions are fraud,” Tente told WRALill Congress is working on. However, the 30-day return requirement makes everything else rather pointless. Crypto deployers are highly unlikely to operate under such rules.”
State Rep. Tim Longest, D-Wake, previously expressed concern to WRAL about having the kiosks at all in the state. Rep. Longest, a consumer protection lawyer, said the bill’s protections could have been stronger.
“I think that we should really question whether these regulations go far enough and if these machines really serve any legitimate purpose,” Rep. Longest said. “You don’t go to put cash in a machine and take out a stock, and yet a stock is exactly the same kind of speculative asset that cryptocurrency is.”
Attorney General Jackson alluded to the DOJ currently looking into cryptocurrency kiosk companies.
“Investigation underway as we speak,” Jackson said.
How are companies responding?
WRAL reached out to several cryptocurrency kiosk companies operating in North Carolina, requesting information on how they plan to comply with new state laws.
Below are responses from Byte Federal, through founder and chief compliance officer Mark Paolillo, and Chief Executive Officer, Paul Tarantino, as well as a marketing spokesperson for CoinFlip. They say many of the protections are already in place, independently, as part of their company’s policies.
Answers to questions are published in full for accuracy.
Question: Which HB 920 changes will require you to update your kiosks?
Byte Federal:Most of HB 920’s requirements match what we already do: scam warnings, blockchain analytics, live customer service, a written anti-fraud program, and dedicated compliance staff. The changes we are implementing before January 1, 2027 include:
- Interactive fraud screens– We will adjust our current fraud screens to meet NC guidelines.
- A 48-hour hold on transactions by brand-new customers– We support this. We have advocated for a waiting period for first-time customers because it gives time to stop a scam before any funds leave.
- New daily limits– $2,000 for new customers and $5,000 for existing customers.
- Updated receipts– Our receipts already meet most of the requirements, and we will add any newly required fields.
- Changes to authentication– Our current authentication process is robust. We need greater clarity on the QR guidelines from NC to see whether they require any changes to our process.
- Fee and spread disclosure within the 12% cap– The 12% fee cap is unprofitable and unsustainable for operators that run a best-in-class regulatory and fraud-prevention platform. If the fee cap is not adjusted over time, best-in-class operators will likely leave the state.
- North Carolina money transmitter licensing– We already hold a Money Transmission License in NC. We have no problem meeting the quarterly location reporting to the Commissioner or designating compliance and consumer protection officers.
CoinFlip:
CoinFlip already provides many of the consumer protections required under North Carolina’s new cryptocurrency kiosk law, including live customer support, scam warnings, and technology that screens for suspicious digital wallets. We appreciate the leadership of Representative Jackson and the collaborative efforts of stakeholders in developing a regulatory framework that strengthens consumer protections while preserving access to legitimate financial services. CoinFlip has held a North Carolina money transmitter license since May 2024 and supports clear, consistent rules and accountability for all operators. We will implement the changes necessary to comply with the law’s requirements for when they take effect.
Question: Does the company plan to reduce its number of North Carolina kiosks?
Byte Federal: Complying with NC regulation is an easy lift for Byte Federal because we already meet the same standards in other states. The problem is the 12% fee cap, a regulation that puts legitimate operators running full compliance out of business in NC. We are optimistic that NC lawmakers can see the error in the fee cap and make adjustments that allow legitimate kiosk operators to do business in the state.
Byte Federal operates 36 kiosks in North Carolina.
CoinFlip: CoinFlip currently operates 152 kiosks across the state and has no plans to reduce its North Carolina kiosk network as a result of the new law.”
Question: What is your policy for refunding scam victims?
Byte Federal: We will comply fully with HB 920’s refund provisions. Under the law, when the Commissioner of Banks determines a transaction was fraudulent and the victim reported it within 30 days, new customers receive a full refund and existing customers receive a refund of fees.
That said, we believe the refund mandate holds compliant kiosk operators to a standard no other part of the financial system is held to. Byte Federal operates under the same federal framework as banks and other money transmitters: the Bank Secrecy Act, the USA PATRIOT Act’s customer identification and due diligence rules, OFAC sanctions screening, and the Gramm-Leach-Bliley Act’s privacy and data-security requirements. Yet when a bank customer is tricked into sending a wire to a scammer, the bank generally does not refund that loss. Federal consumer protection rules for electronic transfers do not cover wire transfers. Wires instead fall under Article 4A of the Uniform Commercial Code, which relieves a bank of any refund obligation when it processed the customer’s payment in good faith and followed agreed security procedures. Courts have applied this to scam victims directly. In one 2024 federal case, a customer who wired money to fraudulent crypto companies could not recover it from the bank, because the customer had authorized the wires and the bank had followed its procedures. A bitcoin transaction is just as irreversible as a wire. When a customer has passed identity verification, read our scam warnings, completed a verification call if they are 60 or older, and attested that they are sending funds to their own wallet without anyone directing them, we do not believe a compliant operator should be treated differently from a bank. The money in a kiosk is not the operators to give back, and the person responsible for the loss is the criminal who stole it.
More broadly, we believe the most effective protection is stopping a scam before any money is sent. Once bitcoin is sent, it cannot be recalled by us or anyone else. That is why our program focuses on the moments before a transaction: the 60+ verification calls, attestations, wallet screening, and now the 48-hour new-customer hold, during which funds can still be returned. Outside the framework established by state law, we provide refunds where Byte Federal failed to follow its required compliance procedures. We also cooperate with law enforcement on every fraud report and provide transaction and wallet data to help trace and recover funds.
CoinFlip:
Our current policy provides transaction-fee refunds to confirmed scam victims. Identifying and stopping suspected scams before funds are transferred is critical when we hold a transaction before a transfer is complete; we can return it to the principal. Refund requests and reported scams are evaluated case by case, and our live support team helps customers report scams and request refunds. When a scam is reported, CoinFlip works with law enforcement to help stop or track scammers. Because blockchain transactions create a public record, investigators may be able to trace funds and, in some cases, assist with recovery. CoinFlip also blocks suspicious transactions and permanently blacklists high-risk digital wallet addresses, so they cannot be used at a CoinFlip kiosk again. We will honor the additional refund rights established by North Carolina’s new law when it takes effect.”
Source: www.wral.com