How Metro Detroit Communities Are Fighting Back Against Cryptocurrency Scams
With the rise of cryptocurrency scams targeting vulnerable populations, particularly seniors, Metro Detroit communities are stepping up with new regulations and measures to combat fraud related to cryptocurrency ATMs. Local officials and law enforcement agencies in Michigan are responding to a sharp increase in crypto-related fraud cases by imposing controls on crypto automated teller machines (ATMs) and raising public awareness.
Growing Concern Over Crypto ATM Scams
Cryptocurrency ATMs allow users to buy digital currency using traditional cash and transfer it to digital wallets. However, fraud schemes involving these machines have escalated in recent years. Criminals often pose as detectives or corporate representatives, contacting victims to falsely claim their bank accounts have been compromised. Victims are then instructed to withdraw cash and load it into a crypto ATM to “trace” the theft, only to have the money disappear into scammers’ hands.
Michigan State Police have reported a significant surge in assistance requests related to cryptocurrency scam investigations. The Michigan Cyber Command Center helped trace 20 such cases in 2023 and 2024 each, but the number tripled to 71 cases in 2025 alone. This rise may partly be due to better awareness among law enforcement about tracing stolen cryptocurrency, but also reflects the nationwide increase in crypto-related fraud.
Local Efforts to Regulate Cryptocurrency ATMs
Several Metro Detroit cities are enacting ordinances to regulate the operation of cryptocurrency ATMs and limit the potential for abuse:
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Sterling Heights: The City Council is considering an ordinance that would enforce daily and monthly transaction limits on crypto ATMs, as well as require licensing for both ATM operators and the stores hosting the machines. The proposal is expected for a vote soon.
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Harper Woods: This city adopted a regulation at the end of summer that aligns closely with those of neighboring municipalities. The rules include restricting transaction amounts and requiring machine operators to register with the city’s public safety department.
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Grosse Pointe Farms: As the first Michigan city to pass regulations in July 2024, their ordinance caps transactions for new users at $1,000 per day and $5,000 over 14 days. It also mandates that customers making purchases over $500 verbally confirm the transaction with a live person via phone or video call. Though currently without crypto ATMs, the city’s regulations were adopted as a proactive measure following a local scam incident involving an elderly resident.
Grosse Pointe Farms Councilman Lev Wood, a driving force behind the city’s ordinance, emphasized the dangers posed by unregulated crypto ATMs. “One thing led to another, and we ended up creating this ordinance,” he said, noting the importance of action at both state and federal levels.
Impact on Seniors and Public Safety
Senior citizens are particularly vulnerable targets in these scams due to their generally larger savings and sometimes limited familiarity with digital technologies. Harper Woods Mayor Valerie Kindle highlighted the daily threat posed to seniors, saying fraudsters “come at our consumers, especially our senior citizens, with double barrels.”
Sterling Heights Police Chief Andrew Satterfield reported that local investigations involved 23 fraud cases in 2025, with victims losing more than $542,000 on average. The typical victim age was 64 years old.
Challenges and Industry Response
Local business owners near crypto ATMs sometimes act as first-line defenders. For example, The Wine Garden in Sterling Heights owner Danny Batou recounted how he intervened when an older woman attempted to use the in-store ATM at the urging of a scammer posing as law enforcement. However, Batou expressed skepticism that regulations alone will stop scammers, stating that fraudsters constantly adapt and that “the only way they can get rid of (scams) is to get rid of the machine.”
CoinFlip, a major crypto ATM operator with over 5,000 machines nationwide, supports the adoption of statewide legislation in Michigan. They advocate for clear, uniform regulations to safeguard consumers while preserving their ability to buy cryptocurrency. The company encourages licensing requirements for all operators and promotes consumer protections.
Calls for Broader Legal Action
Recognizing crypto fraud as a growing national issue, local officials are calling for stronger state and federal laws. Sierra Donaven, Grosse Pointe Farms Councilwoman and former federal agent, urged congressional action to combat the scope of cryptocurrency scams.
At the federal level, Senator Dick Durbin (D-IL) introduced the Crypto ATM Fraud Prevention Act in February 2025. The bill aims to require machine operators to post fraud warnings, implement anti-fraud policies with live support, limit transaction amounts for new users, and mandate refunds for scam victims who report incidents within 30 days. It also proposes that operators register with the Treasury Department and provide traceable transaction receipts. While referred to the Senate Banking Committee, the bill has not yet received a hearing.
Staying Safe with Cryptocurrency ATMs
Law enforcement advises consumers to exercise caution when using crypto ATMs. Detective Jennifer Schlaufman of the Michigan Cyber Command Center recommends only using these machines to buy cryptocurrency for personal wallets or to send to known contacts. She strongly warns against depositing money into a crypto ATM when contacted unsolicited via phone, email, or text.
Given the rising prevalence of crypto scams and the financial losses suffered by many victims, particularly seniors, Metro Detroit communities are utilizing regulatory tools and public education to fight back. Through a combination of local ordinances, law enforcement vigilance, and calls for broader legislation, Michigan hopes to protect consumers and reduce the incidence of cryptocurrency fraud in the years ahead.