CNBNews

South Jersey is shaping up to be a flashpoint in the battle over cryptocurrency scams, with Gloucester County Senator Paul Moriarty leading the charge against Bitcoin ATMs. These machines, which have quietly popped up in gas stations, convenience stores, and corner shops across the state, allow users to convert cash into cryptocurrency without needing a bank account or even providing ID. On first glance, they offer a quick and easy way into crypto, but authorities say they’ve become a favorite tool for scammers, and Moriarty wants them gone.

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While fraud tied to crypto ATMs has grown, much of it stems from outside manipulation rather than the technology itself. Scammers often pose as government officials or law enforcement, pressuring people into handing over cash under fake threats, like bogus warrants or tax issues. The targets, caught off guard, are told to deposit the money into a nearby crypto ATM. 

Crypto kiosks, like some online platforms that let users buy crypto with a credit card and no verification, were built for speed and convenience. These tools make it easier for everyday users to access digital currencies without going through a long sign-up process. While this streamlined access can be misused in certain scams, lawmakers say the bigger concern lies in how scammers manipulate people, not in the technology itself.

For Moriarty, the lack of oversight is the core issue. He introduced a bill in the New Jersey Senate that would ban the machines entirely. He says they serve no real purpose other than to help criminals move money in secret, and he’s not alone. A 2021 state commission report recommended stricter rules, and law enforcement officials have long complained that crypto kiosks are almost impossible to track.

That same report detailed how scammers repeatedly targeted older adults, who are three times more likely to be duped than younger users. Some victims lost thousands, and because many people feel embarrassed or don’t know where to report the crime, experts say the actual number of cases is probably much higher. Data backs this up, as an FTC report says that consumer reports have increased ten times from 2020 to 2024. 

While New Jersey’s bill would go further than any other state by banning the machines outright, other states are trying to regulate instead. In Maryland, lawmakers are working on legislation that would cap crypto ATM transactions at $2,000 a day and limit fees. Operators would also have to post warnings and offer real-time customer support. Vermont, Minnesota, and Nebraska already passed similar rules, and bills are pending in more than a dozen other states.

But New Jersey’s move would be the boldest. If the bill passes, anyone caught operating a crypto ATM in the state could face a $10,000 fine on the first offense, with the penalty doubling for repeat violations. Crypto ATMs, which have grown by 6% across the U.S. in 2024, are often run by private operators who can charge steep fees, sometimes as high as 20%, and usually offer little information about who owns or manages them. 

Not everyone agrees with a total ban, however. Crypto industry groups argue that regulation is a better solution and warn that banning kiosks could limit access for people who use them for legitimate reasons, like sending money to family abroad or moving funds without a traditional bank. But Moriarty doesn’t buy it. He believes the machines serve no clear public benefit and sees their removal as a necessary step to protect residents, especially seniors, from being tricked out of their life savings.

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Even so, the bill’s future is unclear. It’s still under review in the Senate Commerce Committee and faces pushback from some lawmakers who aren’t convinced a full ban is the answer. Moriarty says he’s working to educate his colleagues, but admits the odds are about even. For now, the debate continues, and in places like Gloucester City, where these kiosks are becoming more common, the outcome could shape how crypto is used and abused for years to come.