Texans lost $56.8 million to cryptocurrency kiosk scams in 2025, more than any other state, according to FBI Internet Crime Complaint Center data presented to a Texas House committee Thursday. The committee chair, Rep. Cole Hefner, told colleagues he has “a pretty good idea coming” for legislation that would go “further than regulating” the machines. Hefner did not disclose the substance of that proposal at Thursday’s hearing. For now, it remains a stated intention, not a filed bill.
Why Texas Lawmakers Are Considering Restrictions
The Texas House Committee on Homeland Security, Public Safety and Veterans’ Affairs took the testimony as part of a broader hearing on foreign financial influence. Rep. AJ Louderback, a committee member, called the kiosk scheme the most “efficient, cleaner way to steal money” he’d seen in his career. That is a lawmaker’s characterization, not a finding.
Kelley Currie, an Atlantic Council fellow appearing as an outside witness, told the committee the machines in gas stations “are run by Chinese money launderers.” That is Currie’s own assessment. The Justice Department has charged Chinese nationals in Southeast Asian scam-center cases and prosecuted Chinese money-laundering networks moving fraud proceeds, but it has not stated that those networks generally operate U.S. kiosks. The hearing record does not resolve that distinction.
Jesse Saucillo, deputy commissioner at the Texas Department of Banking, testified in an official capacity, not as a one-off comment. He said recovery is close to impossible once stolen funds reach an unhosted wallet and then “gets into a mixer,” and noted that AI-generated impersonation of police and state agencies is making scam calls harder to detect.
Federal Warnings and State-Level Crackdowns
The Texas hearing did not happen in a regulatory vacuum. FinCEN, Treasury’s Financial Crimes Enforcement Network, issued a formal Notice on August 4, 2025, directing financial institutions to watch for suspicious activity tied to convertible virtual currency kiosks. The notice cited fraud, cybercrime, and drug-trafficking-organization activity among its Anti-Money Laundering priorities.
That is agency policy, not one official’s opinion. FinCEN Director Andrea Gacki said in the release that “criminals are relentless in their efforts to steal money from victims, and they’ve learned to exploit innovative technologies like CVC kiosks.” Kiosk operators are regulated as money services businesses under the Bank Secrecy Act, obligated to register and file suspicious activity reports, obligations that predate this week’s hearing by a year.
Indiana banned the machines outright in March 2026, the first state to do so, with roughly 900 kiosks running when the law took effect. Minnesota followed. Neither state action is linked to an official state government source here; both are drawn from secondary reporting and are presented as such, not as independently verified by us.
Tennessee’s ban, Public Chapter 766, took effect July 1 and cleared its first legal test July 7, when a federal court denied a request to block enforcement while a broader constitutional challenge proceeds. The ban remains in force during that litigation, not resolved by it.
Separately, Massachusetts’ attorney general reportedly sued Bitcoin Depot in February 2026, a claim reported elsewhere and not independently confirmed by us. Connecticut is reported to have suspended the company’s operating license, and West Virginia is reported to have created a new licensing regime, both reported elsewhere and unverified independently. Iowa’s attorney general sued both Bitcoin Depot and CoinFlip after finding 98% of the company’s Iowa kiosk transactions were scams.
Bitcoin Depot, once the largest U.S. kiosk operator with more than 9,000 machines, filed for Chapter 11 bankruptcy in May 2026, citing “increasing litigation and regulatory enforcement,” and shut down its roughly 900 Texas kiosks in the process. Maine’s regulator separately secured a $1.9 million settlement from the company to reimburse victims.
CoinFlip’s Cross-State Regulatory Position
In June, CoinFlip’s director of government affairs, John Turk, told a Texas Senate committee that the company supports “robust consumer protections” from the state. That is a position offered directly to lawmakers, not a company statement issued after the fact. Weeks earlier, GPD Holdings LLC, doing business as CoinFlip, had joined Charles Wernicke, doing business as Private IT Corporation, in suing to block Tennessee’s ban before it took effect.
That suit sought a temporary restraining order. The court denied it July 7, finding the plaintiffs had not shown they were likely to succeed on the underlying claims. The case continues on the merits: CoinFlip’s legal challenge to the ban itself has not been decided, only the emergency request to pause it.
Read together, the record shows a company publicly endorsing consumer-protection measures in one state while actively litigating against a prohibition in another. That is a documented contrast in regulatory posture, not a settled account of motive, and one the committee testimony in Texas did not address directly.
Texas’ Next Regulatory Step
Hefner has not disclosed specific legislative details beyond signaling his proposal would exceed simple regulation. Tennessee’s ban has survived one procedural challenge; Indiana’s has stood since March. Texas lawmakers have two live templates to draw from. What Texas ultimately proposes, and whether kiosk operators contest it the way CoinFlip has in Tennessee, remains to be seen.
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