The Stillwater City Council passed an ordinance this week that bans cryptocurrency ATMs within the city limits.

City officials say the machines themselves are legitimate when it comes to exchanging cash for shares of Bitcoin and other cryptocurrencies, but the machines are often used by scammers.

The scams often include a phone call, email or text message that is sent to an individual, claiming that they owe money, and they must pay it now. The scammers then work to convince the victim to withdraw cash from their bank and then send that cash through one of their local cryptocurrency ATMs.

Chief Brian Mueller says Stillwater residents have already been scammed out of $250,000.

“There is another quarter million dollars that was asked for with individuals trying to scam people, but the residents didn’t end up giving them the money,” Chief Mueller said.

The police department reached out to the city attorney’s office to see if there was anything the city could do to prevent these scams from taking place.

The Stillwater City Council wrote up an ordinance to ban these machines from the city and council members passed the ordinance Tuesday night.

KARE 11 has reached out to the company that manages these three ATMs in Stillwater to receive an official response to the new ordinance, but as of Thursday evening, we have not received a reply.

Stillwater isn’t the only community that is experiencing these problems.

Parker Maertz leads the Consumer Action Division at the Attorney General’s Office.

He says the AG’s office receives complaints every day from people who have been scammed through cryptocurrencies.

“We have received reports from all four corners of the state,” Maertz said. “It’s just very, very difficult once that money has been sent.”

Maertz says the state legislature passed a law last year that set a daily limit of $2,000 on these ATMs, but he says scammers have found ways around this limit.

KARE 11 inspected a local cryptocurrency ATM, and we did see a warning message on the screen that encouraged users to think twice before they approve a transaction.

However, both Mueller and Maertz agree that victims are often in distress, and they don’t take the time to read these warnings.

“We just think that eliminating these machines from our community just eliminates one more step for these individuals to be taken advantage of,” Mueller said.

Stillwater Mayor Ted Kozlowski says several communities in Minnesota and Wisconsin have reached out to city officials to learn more about this ordinance.

Mayor Kozlowski says the new ordinance will take effect on Friday, April 18..