Haverhill, MA moves to ban crypto ATMs citing fraud risks

• Haverhill City Council is considering a full ban on cryptocurrency ATMs due to concerns over financial fraud and money laundering.
• Mayor Melinda E. Barrett introduced the ordinance, which received a unanimous 11 votes during a preliminary council meeting on March 17.
• If the ban is enacted, operators will have 60 days to remove their machines or face daily fines of $300.

Local Legislative Action

The city of Haverhill, Massachusetts, is moving toward a total prohibition of cryptocurrency kiosks within its jurisdiction. Local officials argue that the lack of state and federal oversight has left residents vulnerable to scams and illicit financial activities. The proposed ordinance would amend the city code to effectively outlaw the machines, citing a lack of recourse for victims of fraud as a primary motivator.

Following the unanimous support from the council, the city is prepared to enforce strict compliance measures. According to data from CoinATMRadar and industry leaders, there are currently at least eight crypto ATMs operating in the Haverhill area. The legislation mandates that these machines be decommissioned and removed shortly after the law takes effect.

Industry and Regulatory Context

Haverhill's move reflects a growing trend of local and state governments taking restrictive action against the crypto ATM industry. Earlier this year, a Minnesota lawmaker proposed similar legislation following a 2024 law that tightened operational rules. These actions come as major industry players face significant legal and financial hurdles.

Bitcoin Depot (BTM), one of the largest operators in the sector, has faced intense scrutiny recently:

• Connecticut regulators issued a temporary cease-and-desist order in March, suspending the company's money transmission license.
• State authorities in Iowa and Massachusetts have filed lawsuits against the firm, alleging its machines facilitate fraudulent schemes.
• The company's stock price has plummeted by more than 90% over the last six months, trading at $2.06 on the Nasdaq as of Tuesday.

Leadership Changes and Market Impact

The instability within the sector is further evidenced by recent executive turnover. Scott Buchanan recently resigned as CEO of Bitcoin Depot after serving for less than three months. He has been replaced by Alex Holmes, a board member and the former CEO of MoneyGram. This leadership transition occurs at a time when the business model for crypto kiosks is under fire for its potential role in money laundering and consumer financial loss.