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A Miami company that owns three cryptocurrency ATMs in Stillwater is asking the city to repeal an ordinance banning the machines.Officials from Athena Bitcoin, which operates more than 3,500 cryptocurrency ATMs across 35 states, say the city’s new ordinance banning crypto ATMs violates state law. The ordinance, which had its second reading and was adopted by the Stillwater City Council on Tuesday night, will go into effect as soon as it is published in the Stillwater Gazette later this month.
Company officials say the ordinance is “preempted” under state law. The ordinance bans an activity that Minnesota law expressly permits, and the state already regulates crypto ATMs, they say.The company owns crypto ATMS at the BP gas station at 1750 Greeley St.
S., the Amoco station at 103 Main St. N.
, and at Haskell’s at 2225 Curve Crest Blvd.Since Jan. 1, 2023, Stillwater police have taken more than 30 crypto-related scam reports from residents totaling almost $213,000, with at least half of that amount having been deposited into cryptocurrency ATMs located in the city.
In October, police received a report that a 75-year-old woman was feeding $20 bills — one after the other — into the Athena Bitcoin ATM at the Amoco station. By the time police arrived, the woman had deposited $5,820 into the machine and was planning on depositing another $14,180 she had in cash.“While state laws attempt to regulate the crypto currency business itself by requiring certain messaging at kiosks, scammers have found ways around the laws and continue to induce victims into feeding significant amounts of money into the kiosks,” City Attorney Korine Land wrote in a April 15 memo to the council.
All transactions conducted at cryptocurrency ATMs are accompanied by high percentage-based fees, sometimes 20 to 30 percent, Land wrote.“Frequently, the hosting business (where the kiosk is located) also receives a percentage of this markup. When you consider the high volume of scam transactions being performed at kiosks, coupled with the excessive fees that are being charged at the kiosks, both the operator and the host are profiting from the victims.
”Athena Bitcoin “regularly works with law enforcement agencies and is genuinely committed to fighting financial crimes, especially those targeting the elderly population,” Robert Musiala, an attorney representing Athena Bitcoin, wrote in an April 14 letter to Land.“Athena Bitcoin would like to work with the city of Stillwater to address the problem of scams involving (Virtual Currency) Kiosks. However, the Ordinance banning VC Kiosks is not the solution,” he wrote.
He said the company looked forward to working with Stillwater on solutions “that respect Athena Bitcoin’s right to operate its business under Minnesota state law.”Forest Lake ordinanceRather than banning cryptocurrency ATMs, Forest Lake officials are moving forward with a plan that would require that all cryptocurrency ATMs located within the city be registered.The proposed ordinance would require owners of businesses where cryptocurrency ATMs are located to register each machine with the city; complete an application; pay a $2,000 fee, and provide written confirmation from the Forest Lake Police Department that the ATM operator had no more than two instances of substantiated fraud within the city in the past six months, according to the proposed ordinance.
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“If you are not doing something that’s harming the people who live or work or play in Forest Lake, then you get to continue,” she said..
