Crypto ATM Operators in Michigan Now Face Licensing, Registration, and Fraud Warnings

Grosse Pointe Farms, Michigan, has become the first town in the state to formally regulate cryptocurrency ATMs despite not having a single one within its borders.

The new ordinance passed unanimously by the city council aims to protect residents from fraud, responding to scam cases in neighboring areas and statewide alerts from Michigan authorities.

Crypto kiosks require licensing and safety measures

Under the new rules, anyone seeking to install a crypto ATM in Grosse Pointe Farms must register the machine with the Department of Public Safety and obtain a valid business license from the city.

Operators are also required to post prominent fraud risk warnings and provide printed consumer protection materials that inform users about the irreversible nature of crypto transfers.

Did you know?
Michigan’s crypto ATM scam incidents increased by over 45% in the past 18 months, according to local law enforcement data from early 2025.

Transaction caps to prevent first-time scams

The ordinance imposes specific usage restrictions on new users: a $1,000 daily limit and a $5,000 two-week cap. These limits automatically lift after the initial 14-day period.

City attorney Bill Burgess explained that first-time use is when scams most often occur, adding that the buffer gives users time to understand how the machine works before trusting it with larger sums.

A community-driven push following nearby fraud

The move comes in response to recent scam cases, including one in nearby St. Clair Shores where a local resident was tricked into sending money via a bitcoin kiosk. The Detroit Free Press also reported rising cases involving crypto ATMs in the metro area.

Council member Lev Wood emphasized that the ordinance aims to bring “a little bit of help” to residents, providing safeguards and transparency before kiosks arrive within city limits.

Coinflip supports proactive measures

Carson Gat, a representative from Chicago-based ATM operator Coinflip, spoke in favor of preemptive limits. He shared a story about preventing an elderly woman from falling victim to a scam at one of their machines.

Coinflip, which has held a money transmitter license in Michigan since April, is among firms advocating for holding periods and ID verification to reduce fraud in the early stages of use.

ALSO READ | Shocking Abacus Exit: Bitcoin Darknet Marketplace Vanishes With User Funds

Crypto ATM regulation ramps up across the U.S.

Grosse Pointe Farms joins a growing list of U.S. jurisdictions cracking down on ATM-based crypto fraud. States like Arizona, Nebraska, California, and Washington have all introduced similar legislation this year.

The city’s move places it ahead of most towns its size in terms of crypto governance, even as other municipalities wait until machines are deployed before acting on regulation.

A trend-setting move in community crypto policy

The ordinance may serve as a model for smaller communities watching fraud unfold in larger cities. By acting proactively, Grosse Pointe Farms signals a shift in how local governments approach crypto infrastructure even when that infrastructure is only theoretical.

As cryptocurrency adoption moves beyond major cities and into suburbia and small-town America, actions like this may lay the groundwork for safer consumer experiences nationwide.