At the regularly scheduled City Council meeting on Dec. 2, a new ordinance will be introduced amending Chapter 29 of the City’s Code of Ordinances to add new licensing and operational regulations for virtual currency machines, including cryptocurrency kiosks and Bitcoin ATMs.
The holiday season is a time when scam activity historically increases, so the City’s action comes at an especially important moment for safeguarding residents, particularly seniors, from fraudulent schemes.
Virtual currency kiosks and cryptocurrency ATMs offer an easy and often anonymous way to convert cash into digital assets. While convenient, these machines have become a fast-growing target for scam artists posing as government officials, tech support, or distressed family members. These scams typically begin with an unsolicited message or call designed to create panic, pressuring victims into withdrawing cash and depositing it into a cryptocurrency ATM. Once converted, the funds are often irretrievable.
Sterling Heights has seen this threat firsthand. Of the approximately 27 cryptocurrency machines operating within city limits, the Sterling Heights Police Department has investigated, or is currently investigating, 23 fraud cases tied directly to these devices. Losses total more than $542,000, with seniors representing most victims. In response, the Police Department recently formed a dedicated “Crypto Task Force” to combat this growing issue.
"Scam artists become especially predatory during the holidays, when people are distracted, emotional, and more vulnerable to urgent-sounding requests," said Sterling Heights Police Chief Andrew Satterfield. "This ordinance is a timely and necessary step to ensure our residents are better protected during one of the most high-risk periods of the year."
Developed collaboratively by City Administration, the Sterling Heights Police Department, and the City Attorney’s Office, the ordinance creates a balanced framework that preserves access to innovative financial technology while enhancing consumer protection and public safety.
Key provisions include:
Licensing Requirements
- Businesses hosting a virtual currency machine must obtain a City business license and a specialty license endorsement.
- Machine owners/operators must also obtain a license from the City Clerk.
- Existing businesses and operators must comply by March 31, 2026.
Fees and Renewals
- Annual license fees and late penalties will be set through the City’s annual appropriations ordinance.
Operational Regulations
- Machines must require photo ID for transactions, display fraud warnings and disclosures, produce receipts and maintain a customer service hotline.
- First-time customers will face transaction limits to reduce risk.
Inspections and Enforcement
- The City may inspect machines prior to and after licensing to ensure compliance.
- Violations may result in license suspension, revocation or denial, and each violation constitutes a municipal civil infraction.
Privacy and Recordkeeping
- Operators must maintain daily transaction logs and service records for at least 90 days.
- The City Clerk will protect personal identifying information from disclosure except as required by law.
With holiday shopping, travel and charitable giving in full swing, the City urges residents to remain vigilant against unsolicited calls, texts or emails demanding urgent payment, especially those requesting deposits via cryptocurrency kiosks.
“This ordinance gives us the tools to better regulate this industry and deter predatory activity,” said Sterling Heights Mayor Michael Taylor. “Our goal is to ensure residents can enjoy the holidays with greater peace of mind and stronger consumer protections in place.”