On May 5, 2026, Minnesota Governor Tim Walz signed Senate File 3868 (“SF 3868” or the “Act”) into law, making Minnesota one of the first states in the country to prohibit virtual currency kiosks statewide, following similar measures enacted earlier this year in Indiana and Tennessee. Codified as new Section 53B.751 of Minnesota Statutes Chapter 53B, the Act prohibits the installation, operation, maintenance, or public availability of virtual currency kiosks in Minnesota beginning August 1, 2026, and imposes winding-down obligations on existing operators through December 31, 2026.

The Act represents a significant shift from Minnesota’s prior regulatory approach, which previously focused on transaction caps, disclosures, and other consumer-protection measures rather than outright prohibition. According to statements by officials from the Minnesota Department of Commerce, fraud schemes involving virtual currency kiosks continued to evolve despite earlier reforms. Between 2023 and 2025, the Department reportedly identified approximately 120 complaints involving virtual currency kiosks, resulting in nearly $1 million in consumer losses, including approximately 70 cases in 2025 alone, accounting for more than $540,000 in losses. State regulators also noted that many incidents likely go unreported and that consumer recovery rates remained relatively low.

Operational Shutdown, Physical Removal, and Payout Obligations

Beginning August 1, 2026, no person may install, operate, maintain, or make available for use a virtual currency kiosk in Minnesota. Existing operators must remove all kiosks from locations where they are visible or accessible to the public no later than December 31, 2026.

The Act also imposes payout obligations on operators that conduct virtual currency transactions exclusively through kiosks. By December 31, 2026, such operators must pay out any money or virtual currency held for or owed to customers as a result of kiosk transactions. Customers may elect to receive payment either in United States dollars equal to the market value of the customer’s virtual currency holdings, or through transfer to a designated virtual currency wallet. Where a customer elects transfer to a wallet, the operator must complete the transfer within 30 days of the payout request and retain proof of the blockchain transfer for production to the Commissioner upon request.

Implications for Kiosk Operators

Virtual currency kiosk operators currently active in Minnesota should begin preparing for the Act’s August 1, 2026, effective date by evaluating operational shutdown procedures, customer payout processes, and kiosk removal logistics. Minnesota’s enactment of the Act, alongside recent legislation in Indiana and Tennessee, may signal increasing willingness among some state legislatures to prohibit kiosk operations entirely in response to continuing fraud and consumer-protection concerns.