Nikolas Sargeant
The city council of Grosse Pointe Farms, a small Michigan town near Detroit, has unanimously passed what appears to be the state's first municipal ordinance regulating cryptocurrency ATMs. The proactive measure comes despite the town currently having no crypto ATMs, with officials citing concerns about protecting residents from increasingly common scams involving these machines.
The ordinance was prompted by a report of a local resident being victimized in a crypto ATM scam at a nearby location in St. Clair Shores. Michigan Attorney General Dana Nessel had previously issued statewide warnings about crypto ATM fraud in April, while local media has documented rising incidents of criminals directing victims to deposit money into these machines under false pretenses.
Under the new regulations, any future crypto ATMs in Grosse Pointe Farms must be registered with the Department of Public Safety, and operators must obtain proper business licenses. The ordinance also mandates clear consumer protection warnings about fraud risks and the irreversible nature of cryptocurrency transactions, addressing what council member Lev Wood called the "very untransparent situation" surrounding these machines.
Perhaps most significantly, the ordinance imposes transaction limits for new users during their first two weeks of operation, capping daily transactions at $1,000 and aggregate spending at $5,000 over the 14-day period. City attorney Bill Burgess explained that this cooling-off period would allow users to become more familiar with the technology before accessing higher transaction limits, potentially preventing impulsive decisions driven by scammer pressure. The Michigan ordinance follows a broader trend of crypto ATM regulation across multiple states, with similar measures being implemented internationally, including new regulations in Australia. However, not all jurisdictions are moving toward restrictions, as some lawmakers like Texas Congressman Pete Sessions have advocated for expanding crypto ATM access in federal buildings.
