Spokane has spoken: no more crypto kiosks. City council was inspired after seeing the wave of crypto scams that defrauded Washington residents of a jaw-dropping $141 million last year. In response, they voted 3-0 to ban these digital ATMs. At first glance, this might seem like a huge victory for consumer protection – a protection from all of those looking to prey on the most vulnerable. Is it really? Or is it a better version of the classic case of throwing the baby out with the bathwater?

Banning Kiosks Solves Problems?

Let's not mince words: crypto scams are a serious problem. And the FBI’s recent accounting of almost $5.6 billion lost across the country is honestly pretty sobering. And the stories of bad actors posing as cops, shaking down older Americans to drain their bank accounts into crypto wallets? Just rotten. Council Member Paul Dillon for once isn’t wrong – these kiosks have turned into the favored scammer’s tool.

Banning the kiosks is like treating a symptom, not the disease. Do we seriously think that taking away a physical point of access will deter high-tech fraudsters? Do we really think they're going to just throw in the towel and get legitimate jobs? Of course not. They'll adapt. They’ll discover new methods of fleecing the cash-strapped and gullible. They’ll move online, using more sophisticated techniques that are much more difficult to trace than a physical kiosk.

Southeast Asia's Crypto Embrace

As someone who spends 5–7 months a year in Southeast Asia, I understand the current. To see how different the approach is in Spokane compared to most countries over there is truly eye-opening. Washington State is getting hammered by crypto scams right now. Unlike Indonesia, Singapore, Malaysia, and the Philippines are all proactively embracing cryptocurrency and moving to regulate it, recognizing its role in promoting financial inclusion especially among their unbanked citizens.

Think about it. Over 600 million people in Southeast Asia do not have access to a bank. The future of crypto is incredibly promising. If you take those risks, it can allow you to join the global economy, send remittances back home, and build wealth. Unlike the United States, these countries have acknowledged the dangers they are already experiencing. They are pioneering efforts to create this tripartide regulatory framework, public education efforts, and innovation all at once. It's a delicate balance, but they understand that burying their heads in the sand isn't the answer.

Is Spokane missing out on opportunities?

  • Financial Inclusion: Could crypto kiosks, with proper regulation, serve the unbanked in Spokane?
  • Technological Innovation: Is the city stifling innovation by shutting down a nascent industry?
  • Economic Growth: Could Spokane have become a hub for blockchain technology with the right approach?

Knee-Jerk Reaction Or Informed Decision?

The "Virtual Currency Kiosk Prohibition for a Safer Spokane" ordinance sounds good on paper, but it feels like a knee-jerk reaction fueled by fear and a lack of understanding. Instead of banning kiosks, Spokane could have implemented stricter regulations:

  • Enhanced KYC/AML: Require kiosk operators to implement rigorous Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures.
  • Transaction Limits: Limit the amount of money that can be transacted through kiosks per day, per person.
  • Public Awareness Campaigns: Launch comprehensive public awareness campaigns to educate residents about crypto scams and how to avoid them.
  • Partnerships with Law Enforcement: Work with law enforcement to identify and prosecute scammers.

The money flowing through these kiosks often ends up in countries with strained relations with the US, Detective Tim Schwering told the council. Banning the kiosks won’t change that flow, it will just force that money through different channels. Trying to stop a river’s natural flow with a sand dam is nonsensical. What we really want is enlightenment.

Look, I get it. Protecting vulnerable residents is paramount. But are we really protecting them with this ban, or just stifling competition and innovation? Is Spokane, in its haste to protect its citizens, cutting itself off from the future of finance?

I believe the growing complexity of these issues requires us to have a more sophisticated dialogue. An honest discussion which includes skepticism about crypto’s promise, but hope for its transformative power paired with appropriate warning. Let’s study and replicate what’s been successful in our diverse Southeast Asian neighbors. Because of this, they are out there using the blockchain to its fullest potential and at the same time, doing the best job of minimizing its downfalls. What do you think?