The St. Paul City Council has voted to ban cryptocurrency kiosks in the city beginning Dec. 21.

St. Paul city council members in support of the ban said scams involving cryptocurrency kiosks/ATMs particularly impact seniors and those with low incomes.

"A lot of them are along Ford Parkway, where we know that there is a concentration of seniors and older folk," said St. Paul Council member Saura Jost.

According to the FBI, last year, there were nearly 11,000 complaints of cryptocurrency ATM fraud, resulting in more than $240 million in losses. 

Ethan McClelland is the director of government relations at Bitcoin Depot, which the city said has 10 locations in St. Paul.

"Placing a reactionary ban on an industry that is already licensed and regulated by the state, which serves a legitimate financial purpose for many St. Paul residents, is unnecessary and will deprive many customers, particularly those who choose to transact in cash, of their only way to participate in the growing digital economy," McClelland said.

"Part of the reason they're becoming so popular is that the people making them have a giant income stream, and the store is putting them in, well, they get a cut of that too," said Bryce Austin, a Lakeville-based cybersecurity expert with TCE Strategy.

According to Austin, fraud is high because cryptocurrency allows anonymity.

"If they can convince you to go to one of these crypto ATMs and put your cash in there, and send them the Bitcoin, it's much, much harder to be traced, and it's almost impossible for you to get your money back," Austin said.

If anyone asks you for money via your phone, email or text, assume it's malicious, he said. For those looking to invest in cryptocurrency, Austin said you can do that with large online banks, while avoiding the 5% to 25% service fees for those who use the ATMs.

"These machines are not a good way to do legitimate cryptocurrency transfers, unless you are in a real hurry for something and are willing to pay that exorbitant fee," Austin said.