Bill to ban unregulated crypto kiosks draws sharp split between consumer advocates and operators

Representative Romer told the committee that House Bill 4 41 would ban the installation and operation of unregulated cryptocurrency kiosks, require removal of existing machines within 90 days and include anti‑circumvention language to stop workarounds. “By removing these unmonitored physical machines from our gas stations and convenience stores, we break the mechanical cycle of these scams,” Romer said.

The sponsor framed the bill as a consumer‑protection measure, citing FBI and FTC warnings and state complaint numbers. Romer said Delaware has received hundreds of complaints and that kiosks have been used to siphon away retirement savings and emergency funds. He described failed regulatory attempts in other states and argued that the kiosks’ instant, irreversible cash‑to‑crypto transactions and high fees make full bans a practical remedy.

Industry representatives pushed back. Larry Lipka of CoinFlip said his company operates with money‑transmitter licenses and offers refunds to scam victims who contact the company: “We are not an unregulated crypto kiosk. We are not unregulated. We are regulated federally and we are regulated by this state,” Lipka said, urging regulation rather than an outright ban. Kim Gomes, a lobbyist for CoinFlip, proposed an amendment to restrict kiosks to Delaware‑licensed money transmitters and to enact a moratorium while regulators craft stricter rules.

Consumer advocates and law‑enforcement officials urged stronger action. Clark Flint Barr of AARP said the kiosks disproportionately harm older adults and cited high percentages of transactions tied to fraud: “When a payment method is overwhelmingly tied to fraud and offers victims very little chance of recovery, the most effective safeguard is to remove that tool entirely,” he told the committee. Lindsey Nashorn, Deputy Director of Investor Protection for the Delaware Department of Justice, said a money‑transmitter license is inadequate to address the speed and cross‑border nature of kiosk‑facilitated fraud and urged the committee to “disarm” the tool used by perpetrators.

An expert with blockchain forensics, Paul Martin, said his research links a large share of kiosk recipient addresses to fraud and international scammers; his virtual testimony was cut short and he was invited to submit written comments. The committee did not take a vote during the hearing.

The next step for HB 441 will depend on whether sponsors and stakeholders can bridge differences between proponents seeking a ban and operators seeking stricter licensing and technical limits. The committee proceeded to its next agenda items without recording a formal action on the bill.