Virtual currency kiosks banned in Spokane Valley after scam causes suicide
May 10-Scammers may have a harder time ripping off people in Spokane Valley after its city council voted unanimously Tuesday to ban virtual currency kiosks.
While there were no comments from council members or the public on the vote, the ban is a significant move for the city to prevent scammers from taking people's life savings, police Chief Dave Ellis said. There has been a surge of fraud cases in the Valley, several resulting in major financial losses and, in one case, a suicide.
"Those kiosks are a tool to facilitate scams," Ellis said. "People are being scammed and being directed to use them by bad actors, by criminals, to transfer money to them."
Businesses with kiosks have 30 days to remove them . After that, business owners can face a $250 penalty and Spokane Valley can revoke their business license.
Last year, Spokane City Council voted unanimously on a similar ordinance banning virtual currency kiosks. The Federal Bureau of Investigation reported that in 2023 there were nearly $5.6 billion in losses because of virtual currency kiosk-aided scams in the U.S. In Washington that same year, there were $141.7 million worth of losses in kiosk-aided scams.
The scams are typically over the phone or sent via text, telling people that they have an arrest warrant for missing jury duty and demanding $10,000, financial crimes detective Elijah Jones said.
The kiosks are typically in convenience stores, gas stations or mini marts. Like any other vending machine, store owners get paid to put the kiosk in their store. According to Ellis, there are roughly 15 kiosks throughout the Valley, but Coinflip, a website that shows locations of virtual kiosks, shows six in city limits.
Several locations, including a Circle K at Pines Road and Valleyway Avenue, removed the kiosks before the vote Tuesday. A Bitcoin ATM still exists at Broadway Mini Mart, right between a Monster drink cooler and an ATM. The owner of the store declined to comment on the kiosk or the ban on them.
Scams like the ones sending people to virtual currency kiosks are common and difficult to track and investigate, Ellis said.
"We've stopped elderly people who are putting their life savings into these kiosks. They're being taken advantage of," Ellis said.
Once money has been transferred at a kiosk, there's no way to recover it, Jones said, adding the kiosks usually charge 17.5% or 50% as a transaction fee.
"We can't go to the ATM and get it back. Companies are sometimes willing to give back a portion of the fees they charge, but they can't refund victims. The scammer is the one who controls the money," Jones said. "What we're trying to do is to make it more difficult for scammers to get the money, so there are more steps that victims have to go through with scammers, and so they'll realize they're being scammed before they lose money."
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