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Grosse Pointe Farms, a small town just outside Detroit, has passed a local ordinance aimed at controlling crypto ATM use—even though the town doesn’t have any yet. The city council voted unanimously on the new rules after hearing about a scam that targeted a resident in nearby St. Clair Shores.

The incident involved a crypto ATM, which scammers instructed a local to use for sending money. That case helped push council members to act early, hoping to protect their residents from similar schemes.

New Rules Target Scam Risks

During Tuesday’s city council meeting, concerns were raised about how easily scammers convince people—especially the elderly—to use crypto ATMs to send money. Council member Lev Wood said the machines create a situation that lacks transparency, making people easy targets.

The new rules require any crypto kiosk in town to be registered with the Department of Public Safety. Operators must also apply for a business license and provide written warnings on the machines about the risks of fraud and irreversible transactions.

One of the biggest parts of the ordinance is a spending cap for new users. The law sets a $1,000 daily limit and a $5,000 cap over the first 14 days of use. After that period, those restrictions are lifted. The idea, according to city attorney Bill Burgess, is to give new users time to understand how the machines work before making larger transactions.

Several other states are also taking action. Arizona, Nebraska, California, and Washington have all stepped in this year to add restrictions or outright bans on certain types of crypto ATM operations.

Coinflip Shares Firsthand Scam Story

Carson Gat, a representative from Coinflip—a Chicago-based digital currency ATM operator—attended the meeting to give his perspective. He told the council about a time he personally helped stop an elderly woman from getting scammed at one of their machines.

Gat said Coinflip has explored similar limits on new users to reduce fraud, since most scams happen during a customer’s first visit. Coinflip has been operating in Michigan since 2019 and was granted a money transmitter license in April.

While the company didn’t oppose the town’s new rules, it did highlight the importance of finding a balance between access and safety. Gat’s appearance also added weight to the council’s concern that this type of scam isn’t just theory—it’s happening.

State And National Action Picking Up

This move by Grosse Pointe Farms comes after Michigan Attorney General Dana Nessel issued a statewide alert about crypto ATM scams back in April. Nessel’s office has warned residents to stay away from machines when someone instructs them to deposit money under pressure.

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Michigan has recently taken a significant step in the realm of cryptocurrency policy, becoming the latest US state to propose the creation of a strategic Bitcoin reserve.

On February 13, Representatives Bryan Posthumus and Ron Robinson introduced HB 4087, a bill aimed at amending the state’s Management and Budget Act. This proposed legislation would allow Michigan to establish a Bitcoin reserve using funds from the state’s general and economic stabilization accounts.

Michigan Joins Growing List Of States Considering Crypto Reserve Bill

The initiative is part of a broader trend in which states across the country are considering crypto reserves as a means of diversification and long-term financial planning. Michigan’s move brings the total number of US states with similar legislation to twenty.

Representative Posthumus, an outspoken advocate for crypto adoption initially expressed his enthusiasm on Elon Musk’s social media platform X, encouraging Michigan to join states like Texas in leading crypto policy initiatives.

Interestingly, Texas Senator Charles Schwertner had introduced a comparable bill to the Texas Senate just a day before Michigan’s proposal.

Michigan can and should join Texas in leading on crypto policy by signing into law my bill creating the Michigan Crypto Strategic Reserve. https://t.co/x2Yke3uWTn

— Rep. Bryan Posthumus (@posthumus_bryan) February 13, 2025

Key Provisions and Potential Impact

Under the proposed legislation, Michigan’s treasurer would have the authority to allocate up to 10% of the state’s general and economic stabilization funds into cryptocurrencies.

The bill also includes provisions for lending the state’s crypto holdings, provided such transactions do not increase financial risk. Additionally, Michigan’s crypto investments would be required to be held through secure custody solutions or exchange-traded products issued by registered investment companies.

Notably, this proposal reflects a growing recognition among states of the strategic value that digital assets might offer. Michigan’s state pension fund already holds exposure to Bitcoin and Ethereum through exchange-traded funds, signaling an existing interest in blockchain-based investments.

In addition to the proposed Bitcoin reserve, Representative Posthumus has floated the idea of a state-backed stablecoin, dubbed “MichCoin.”

This hypothetical digital currency would be tied to Michigan’s existing gold and silver reserves, offering an approach to leveraging state-held assets in a blockchain-based environment.

So what is MichCoin?

– It’s a Stablecoin, which I believe the state of Michigan should create.

– It will have real value — tied to our gold and silver reserves.

– It could become the most powerful financial asset in our state’s history. pic.twitter.com/15n0H3Wy2x

— Rep. Bryan Posthumus (@posthumus_bryan) February 13, 2025

If enacted, Michigan’s bill would align the state with other jurisdictions exploring or enacting crypto investment strategies. While twenty states now have similar legislation advancing through their legislatures, Michigan’s potential adoption of a Bitcoin reserve could set a precedent for others still on the fence.

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