Maria was standing in front of a cryptocurrency ATM, $5,000 in hand and a moment away from being scammed.
Fabricated court documents, supposedly sent by text from the Travis County Sheriff’s Office, threatened the 72-year-old with arrest if she didn’t feed the money into the “crypto kiosk” at a grocery store. A voice on her cellphone, claiming to be an officer, calmly coached her through the process of posting bail for failing to appear for a jury summons and contempt of court.
Seeing the machine, however, snapped her out of the fog created by the persuasive fake officer.
“I was a wreck the whole time. I was very nervous, very tense,” the Austin woman said. “And then when I walk in, I said, ‘You’re telling me it’s this yellow thing?’ and he says yeah. [But] that’s a Bitcoin machine. I’m not putting any money there.”
That last-minute realization made Maria more fortunate than almost 1,200 other Texans who lost a combined $56.8 million last year through similar kiosks, almost double the amount taken from victims in the second-highest state, Florida.
Scams using the kiosks have increased rapidly in the United States over the past two years, according to the FBI, prompting other states to restrict or ban the machines. Texas regulators currently have no oversight over the kiosks, a gap that fraudsters regularly exploit, public safety advocates say.
The Texas Tribune spoke with a dozen people who were victims or near victims of kiosk fraud, including one who lost almost $100,000 and another swindled out of $63,000. The victims asked not to be named, saying they feared being targeted again. All said they felt shame or humiliation, symptoms that experts say reduces the likelihood that crimes are reported, likely making the steadily increasing rates of kiosk-aided fraud an undercount.
Victims described elaborate schemes involving phone numbers that appeared to belong to police departments, state agencies or their banks, sometimes providing real names, titles and badge numbers.
In some cases, fraudsters knew personal details — such as Maria’s recent move — and provided realistic court documents with fake case numbers and the full name and home address of victims.
In every case, the scammers’ goal was to direct victims to withdraw cash from their banks and head to a cryptocurrency kiosk to feed the money into a slot. The cash is converted into cryptocurrency that is whisked away into unidentifiable crypto accounts.
“[Cryptocurrency] kiosks serve no useful purpose, and no rational person would choose to use them, except for the purpose of hiding illicit funds,” Adam Colby, executive director of the Texas Financial Crimes Intelligence Center, said during testimony before a Texas House committee in May.
An estimated 4,000 kiosks have been installed in convenience stores, gas stations and other businesses across Texas. Nobody knows the exact number, but the ATM-like machines are described by law enforcement as a key tool for scammers who particularly target elderly Texans, though adults of all ages have been swindled.
These crypto ATMs have streamlined the speed of scams while making it almost impossible for local law enforcement to track and retrieve stolen money.
“It just didn’t seem like there was really any sort of hope that there would be any form of accountability for these things,” said a North Texas man who lost $5,000 after being threatened by someone impersonating the Tarrant County Sheriff’s Office.
Cutting out the middleman
Crypto kiosks let users deposit cash to purchase certain cryptocurrencies and designate a “wallet” to receive the digital assets.
Cryptocurrency is increasingly preferred by scammers because it is not subject to the same banking laws as traditional currency — especially in how it can be transferred internationally, where most scammers are based, according to law enforcement.
“Crypto is a wonderful, amazing, horrible, terrible invention, right? Obviously, the advantage of crypto is you can move money much faster without supervision,” said Michael Levine, chief felony prosecutor for the Cyber and Financial Crimes Division of the Harris County district attorney’s office.
Fraudsters usually send or text a QR code that can be scanned into a kiosk, sending the purchased cryptocurrency to a particular wallet, similar to making a bank deposit.
Once received, the crypto is often distributed to dozens of additional wallets and mixed with legitimate funds, making tracing difficult even for financial crime experts. The FCIC estimates there is only a 36- to 48-hour window to recover the stolen money, which rarely occurs.
None of the victims who spoke to the Tribune had the stolen money returned. When they reported the crime, they said, officers had a similar message: Don’t get your hopes up.
Absent traditional means of restitution, some police have taken more direct approaches. In McLennan County, police seized a kiosk after a 82-year-old woman was scammed out of $15,000 in 2023. The kiosk operator, Bitcoin Depot, sued the county over the seizure and agreed to a settlement stipulating that they were not involved in the fraud. The money was returned to the woman.
Last summer, a sheriff’s deputy from Jasper County with a search warrant sawed open a Bitcoin Depot kiosk with a power tool after a family lost $25,000 to a scam. The company threatened to sue the county, but ultimately filed for bankruptcy in May.
The county’s sheriff, Chuck Havard, declined to talk about the incident or whether the victims retrieved their money because the criminal investigation is ongoing, but said he thinks legislators should increase the punishment for anyone caught participating in these scams.
“I just think that, you know, these scammers, if we can catch them, I think the consequences should be very, very severe,” Havard said. “I know a lot of legislators are talking to their constituents, because trust me, they’re getting scammed all the time.”
“Texas is behind other states on this”
Only California has more crypto kiosks than Texas, according to available data, and the Tyler-based Financial Crimes Intelligence Center estimates that roughly 70% of the people using them are over age 60.
State Rep. Mitch Little, R-Lewisville, was already acquainted with the kiosks before he attended a House committee hearing about them in May. A family member fell victim to a kiosk-aided crypto scam, but Little said he was more alarmed when an FCIC official testified the machines were mostly used for scams.
“They suggested that they needed to be banned, and to have law enforcement come out that stridently about it was a little bit surprising,” Little told the Tribune. “I think it seems to suggest that there are way fewer legitimate uses of these devices than you would expect.”
Texas House and Senate committees have held recent hearings about the kiosks under directives that frame the issue differently. To prepare for action when the Legislature meets in 2027, House Speaker Dustin Burrows wants to examine solutions to elder fraud stemming from “emerging technologies,” while Lt. Gov Dan Patrick asked senators to look into ways to regulate kiosks amid the broader crypto landscape.
In late June, a handful of East Texas lawmakers from both chambers met with the FCIC to discuss how to tackle regulating the machines, including Rep. Cole Hefner, R-Mount Pleasant. Hefner said he or another representative will seek to ban the kiosks next session.
“From the law enforcement experts in the room, I don’t see any reason to be regulating them,” Hefner said. “Based on their testimony, based on their experience, [kiosks] serve no other purpose but money laundering or scamming folks, and we just need to get rid of them.”
Thirty states have passed laws regulating the kiosks, including four in the past four months that banned the machines.
In 2025, separate bills directing the Texas Department of Banking to regulate the kiosks passed the state House and Senate but were not approved by both chambers.
Andrea Earl, associate state director for AARP, called it a missed opportunity.
“The state of Texas is behind other states on this, and then really lost momentum last session,” Earl said.
Without state regulations, cities have limited options to help potential fraud victims. The San Antonio City Council passed an ordinance in June requiring warning signs on every machine detailing the risks of fraud, an option the El Paso City Council discussed Tuesday. Other cities and counties have begun warning residents about the spike in kiosk fraud as well.
“I don’t know how far they can go without legislation giving them authority to go all the way, but there’s probably some things locals could be doing as far as informing and educating the public and letting them know that this stuff is going on,” Hefner said.
In Texas, a state that has championed crypto and encouraged its use in private business and government affairs, regulating even a small but growing financial sector could meet resistance.
“Texas, as a predominantly Republican, conservative state, generally lets the market solve its own problems, and I’m very sensitive to that,” Little said. “I don’t think we should just step in and ban things because we don’t like them or we’re worried about them or they’re a novelty … but it’s pretty obvious we have a problem.”
Before the Legislature meets in January, Little said he wants to hear from kiosk operators on rates of fraud, how many machines they operate and what guardrails are in place for consumers — information he hopes they’ll provide willingly.
“It should set off a few alarm bells”
Kiosk operators say their machines are often used for legitimate transactions, but they have been met with tighter regulations in other states as scams have increased.
Bitcoin Depot, the nation’s largest crypto kiosk operator, filed for bankruptcy in May citing “increasing litigation and regulatory enforcement.” It shut down its network of kiosks, including roughly 900 in Texas, which a court filing described as the company’s “highest concentration of active kiosks.”
Several victims the Tribune spoke with said scammers directed them to Bitcoin Depot machines. One faux court document sent to Maria included a falsified signature from the sheriff and a picture of a company kiosk, describing it as a “designated” machine for the county.
A public relations representative for Bitcoin Depot referred the Tribune to a May press release that announced the company’s bankruptcy and said it was intended to wind down operations and “facilitate a sale of its assets.” Bankruptcy proceedings are underway for the Georgia-based company in a Texas federal bankruptcy court.
An investigation by the Iowa attorney general’s office found that 98% of transactions through Bitcoin Depot’s kiosks in the state were scams, prompting the agency to sue the company and another, CoinFlip.
CoinFlip’s director of government affairs, John Turk, told a Texas Senate committee in June that the company supported robust consumer protections from the state. Some operators like CoinFlip run their own hotlines for customers and have posted warnings on their machines, which are not required in Texas but are in other states.
“We appreciate the Legislature’s willingness to engage with responsible operators and focus on practical safeguards,” Turk testified. “For 2027, we would encourage Texas to continue that work with a clear, uniform framework for cryptocurrency kiosks.”
In an email to the Tribune, a CoinFlip spokesperson said the company takes consumer protection seriously.
“As evidenced by our strong public support of legislation in states across the country, we strongly believe in commonsense rules and clear disclosures, and want everyone in the industry to be held to the same high standards we meet voluntarily,” the spokesperson wrote.
All the victims and near-victims the Tribune spoke with had never heard of the kiosks before they were targeted despite frequenting some of the stores where they operate.
Such was the case for a Katy-area resident who found his mother at a rural gas station feeding roughly $63,000 into a kiosk. At the direction of a scammer, she had cut contact with her family, prompting her son to call police who helped find his mother.
The son said he was frustrated by a lack of guardrails for the machines, including daily transaction limits, that could keep scammers from collecting large sums of money all at once.
“I think it should set off a few alarm bells if someone’s shoveling tens of thousands of dollars into one of these machines at a Valero station in Gonzales, Texas. I mean, that’s just kind of weird,” he said.
Disclosure: AARP and Valero have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in The Texas Tribune’s journalism. Find a complete list of them here.