Tag: Negative

Texans Lead Nation in Crypto Kiosk Scams, Losing $56.8 Million

Texans lost a staggering $56.8 million to cryptocurrency kiosks last year, more than any other state, according to figures presented to a legislative committee on Thursday. The state accounted for 1,179 of the 13,460 complaints logged nationally by the FBI in 2025, a year that saw reported losses to these machines surge 58% to $389 million.

These kiosks, commonly found in gas stations and convenience stores, allow users to convert cash into cryptocurrency. The Texas Tribune estimates there are approximately 4,000 such machines operating across the state. Scammers frequently coerce victims into withdrawing funds from their bank accounts and feeding the cash into these kiosks.

Lawmakers Grapple with Crypto Fraud

The House Committee on Homeland Security, Public Safety and Veterans’ Affairs, which had convened to discuss foreign financial influence, quickly turned its attention to cryptocurrency fraud. “In my career, I’ve never seen a more efficient, cleaner way to steal money,” stated Rep. AJ Louderback. Kelley Currie, a fellow at the Atlantic Council, informed the committee that Interpol now categorizes scamming as an industry on par with drug and human trafficking.

Currie further alleged that the gas station kiosks are “run by Chinese money launderers.” While the Justice Department has brought charges against Chinese nationals in connection with cryptocurrency fraud operations in Southeast Asia and prosecuted Chinese money laundering networks involved in moving scam proceeds, it has not publicly stated that these groups are generally operating the kiosks.

Recovery Efforts Prove Difficult

Jesse Saucillo, deputy commissioner at the Texas Department of Banking, explained that once funds are moved, recovery is nearly impossible. He noted that the money typically goes to an unhosted wallet, which then “gets into a mixer” and beyond, making it “very hard to get any of that back.” Saucillo also pointed out that AI-generated impersonations of police and state agencies are making the initial scam calls more convincing.

States Implement Varying Regulations

According to AARP, approximately 30 states have enacted legislation related to crypto kiosks since 2023. South Dakota has implemented transaction caps of $1,000 per day and $10,000 per month, along with a requirement for full refunds for fraud victims. Wisconsin and Virginia have similar caps in place. In Maine, the state regulator secured a $1.9 million settlement from Bitcoin Depot to reimburse victims.

Indiana became the first state to ban these machines outright in March, enacting a law that empowers the attorney general to sue both operators and the businesses hosting them. Nearly 900 kiosks were operational in Indiana when the governor signed the legislation. Tennessee and Minnesota have since followed suit.

Texas Considers Stronger Measures

Committee chair Rep. Cole Hefner indicated that Texas would explore “doing more than regulating them,” hinting at forthcoming legislation. “I got a pretty good idea coming down,” he told colleagues. “And it’s kind of simple, but kind of abrupt.”

New York Sues Kalshi as Legal Pressure on Prediction Markets Intensifies

New York Governor Kathy Hochul and Attorney General Leticia James have filed a lawsuit against Kalshi, a prominent prediction market platform. This action represents a significant escalation in the ongoing dispute over whether event contracts fall under federal commodities law or state gambling regulations.

According to a press release from the New York Attorney General’s office, James and Hochul allege that Kalshi is operating illegal gambling products within the state without the requisite licenses. The complaint, filed in Manhattan state court, seeks to prevent the platform from offering its event contracts to New York residents. It also requests financial penalties, forfeiture of profits, and restitution for affected customers.

The lawsuit describes event contracts as instruments that allow users to trade on the outcomes of various real-world events, including sports matches, elections, and economic data releases. However, New York officials contend that these contracts constitute unlicensed gambling under state law.

Furthermore, the officials argue that Kalshi permits individuals between the ages of 18 and 20 to participate, despite New York State law requiring bettors to be at least 21 years old. Kalshi, however, maintains that its products are federally regulated derivatives overseen by the U.S. Commodity Futures Trading Commission (CFTC), and not gambling products subject to state gaming laws.

The lawsuit from New York comes just weeks after a federal judge denied Kalshi’s request to prevent state officials from enforcing gambling laws while the broader legal case unfolds.

The rapid growth of major prediction market platforms like Kalshi and Polymarket has drawn the attention of regulators, marking the latest development in an increasingly complex jurisdictional dispute over their operations. The CFTC has consistently asserted its authority over federally registered prediction markets, while New York officials argue that event contracts closely resemble traditional betting. The CFTC has previously sued New York, asserting that federal law preempts state attempts to regulate these products.

New York has recently filed similar lawsuits against prediction market businesses operated by Coinbase and Gemini, alleging they offered the same illegal gambling services without proper authorization.

Meanwhile, Kalshi and Polymarket are also facing significant backlash internationally, with bans implemented in jurisdictions such as Argentina, Spain, Brazil, and Indonesia.

New York State Seeks Billions from Prediction Market Kalshi, Demands Shutdown

New York is demanding at least $36 billion from Kalshi, urging a state court to shutter the prediction market and seize triple its earnings. Attorney General Letitia James filed the lawsuit Friday, alongside a motion for a temporary restraining order, characterizing the platform as an unlicensed gambling operation across eight charges. The filings state the damages figure is a minimum, pending a full accounting.

The charges range from violations of New York’s constitutional ban on gambling to bookmaking, possession of gambling records, unlicensed mobile sports wagering, and the federal Wire Act. The state is also seeking $100,000 for each offer of sports wagering, as well as restitution and disgorgement of profits.

“Kalshi has chosen to ignore New York’s gaming laws, which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services, and ensure that every company plays by the same rules,” stated New York Governor Kathy Hochul. She added that the state was taking action to halt its “illegal behavior” and compel the firm to comply.

Investigators conducted test bets, including four contracts on Connecticut to defeat Michigan in April, costing $1.14 including fees. The petition alleges that Kalshi permits 18-year-olds to open accounts, while New York’s legal age for gambling is 21. Furthermore, the platform offers markets on games involving New York college teams, a practice prohibited even for licensed operators.

Federal Agency’s Prior Action

The Commodity Futures Trading Commission (CFTC) had initiated action earlier. In April, it sued New York to assert federal law grants it exclusive authority over event contracts. On Thursday, the CFTC requested a restraining order in that case, barring the state from pursuing criminal or civil enforcement against Kalshi or any other CFTC-registered platform. New York filed its lawsuit the following day.

Kalshi’s Legal Struggles

Kalshi has largely faced setbacks in its legal battles. The company sued the New York State Gaming Commission in the Southern District last October. It was denied a preliminary injunction on July 7 and refused protection pending appeal on July 27. A Michigan judge issued a restraining order against Kalshi in June, and King County Superior Court in Washington granted a preliminary injunction on July 20. The company’s two notable victories include the Third Circuit, which upheld an injunction against New Jersey in April, and Minnesota, where a federal judge blocked the state’s ban on July 27.

The Minnesota ruling hinged on whether event contracts qualify as swaps under the Commodity Exchange Act. Judge Katherine Menendez determined that many do, singling out sports and pop-culture markets as contentious cases. New York’s lawsuit primarily targets sports-related markets.

Broader Regulatory Campaign

New York represents the latest front in a campaign that the Trump administration has pursued for months. The CFTC has sued Illinois, Arizona, and Connecticut over their attempts to regulate event contracts, added Wisconsin, and moved against Minnesota within hours of its ban becoming law. The President has publicly supported the agency, labeling state officials who oppose prediction markets as “SCUM.”

Kalshi’s own figures, cited in the petition, place its valuation at $22 billion and its annualized trading volume at $178 billion. In April, Attorney General James filed similar lawsuits against Coinbase and Gemini based on analogous legal theories.

South Korean Authorities Uncover Major Cryptocurrency Scam Targeting XRP Holders

South Korean authorities have dismantled a sophisticated cryptocurrency fraud operation that preyed on investor interest in a newly launched blockchain token. The scheme utilized a fake investment platform to defraud XRP holders, vanishing after amassing millions of dollars in digital assets.

The investigation was initiated after a cryptocurrency exchange operating internationally flagged a series of suspicious transactions. Within three days of receiving the alert, law enforcement officials successfully traced the illicit activity and froze digital wallets containing the majority of the stolen funds.

According to the findings of the probe, the fraudulent website emerged shortly after the Flare Network introduced its FXRP token in October 2025. The platform enticed users with promises of monthly returns ranging from 1.5% to 1.8%, while assuring them that their initial deposits would be secure.

Investigators discovered that the perpetrators meticulously crafted convincing online content to lend an air of legitimacy to the fake project. This included the creation of fabricated reference pages, blog posts, online articles, and promotional videos designed to build trust among potential victims.

The investigation also revealed a deliberate strategy employed by the scammers: victims were instructed to transfer their XRP through overseas exchanges before sending the funds to designated wallet addresses. This method was intended to make the transactions appear more legitimate and to help the organizers distance themselves from the illicitly obtained assets.

The fraudulent website operated for just over a week before abruptly shutting down without notice, having successfully attracted deposits from numerous investors. During its brief operational period, seventy-one victims transferred approximately 3.4 million XRP, valued at roughly $8.6 million (12.3 billion won), into wallets controlled by the suspects.

Subsequent blockchain tracing indicated that the suspects’ wallets handled digital assets totaling approximately $19 million (27.3 billion won) throughout the operation. Authorities managed to freeze about $12.1 million (17.3 billion won) on foreign exchanges, but the remaining funds have not been recovered.

The confirmed losses averaged around $121,000 (173 million won) per victim, though individual amounts varied significantly. Police reported that at least one victim lost over one billion won through the fraudulent platform.

The financial investigation culminated in several arrests within South Korea. Three men, in their late twenties and thirties, were taken into custody during the course of the investigation. Two of the suspected organizers are facing aggravated fraud charges, while a third suspect remains overseas and is the subject of an international alert.

Flock Safety’s automated license plate reader (ALPR) cameras are encountering increasing opposition and legislative scrutiny across the United States, driven by widespread privacy concerns and documented instances of potential misuse. Lawmakers are considering withholding federal funding for agencies utilizing the technology, while some law enforcement departments are re-evaluating or suspending their partnerships with the company.

Flock Safety cameras photograph vehicles, read license plates, and identify vehicle characteristics. Participating law enforcement agencies can use the data for criminal investigations, locating stolen vehicles, and finding missing persons. The company states its cameras do not use facial recognition and typically retain data for 30 days, unless local laws mandate a different period.

However, critics argue that the technology’s capabilities extend beyond its stated public safety purposes. Privacy advocates cite broader potential uses, including searching license plate databases during protests and investigations. The Institute for Justice reported over two dozen cases where ALPR systems were allegedly used to stalk romantic partners. In one instance, Milwaukee prosecutors charged an officer in February for allegedly using the system to track a romantic partner, and an internal affairs detective investigating that case was later arrested for similar alleged misuse.

These concerns have fueled direct action, with activists spray-painting, taping over, disabling, and destroying Flock cameras. The Guardian identified at least 33 incidents of camera obstruction across 23 states, and several individuals face criminal charges for allegedly destroying multiple cameras.

In response to the growing backlash, Kentucky Congressman Thomas Massie plans to introduce legislation that would withhold federal funding from municipalities and law enforcement agencies deploying ALPR systems, including Flock cameras. This legislative push reflects a broader trend of re-evaluation.

The Los Angeles Police Department has suspended its partnership with Flock, citing concerns over privacy, data sharing, security, and contract terms. Similarly, Monroe County, Indiana, voted to end its contract with Flock a year early, and Leon County, Florida, delayed funding for additional cameras due to resident questions about data collection, storage, and sharing.

Flock Safety CEO Garrett Langley has acknowledged the concerns, stating the company takes privacy seriously and is working to balance public safety with individual liberties. Langley previously apologized for describing anti-Flock activists as a ‘terroristic organization,’ calling the comments a mistake and emphasizing the company’s efforts to listen to critics and find a balance.

Despite Flock Safety’s assurances and stated commitment to privacy, the tension between the perceived benefits of ALPR technology for public safety and the potential for privacy violations and misuse continues to shape the debate and influence policy decisions across the country. The full extent of Flock data usage beyond criminal investigations and missing persons cases, as well as the specific data retention periods in all jurisdictions, remain areas of uncertainty.

Why This Matters

The materials describe a narrow update: Public and legislative opposition to Flock Safety’s automated license plate reader cameras is growing due to concerns about privacy and potential misuse. The exact timeframe for the reported incidents of misuse and protests.

Broader Context

Source materials place the factual news in this context: Public opposition to Flock Safety’s automated license plate reader cameras is spreading from city council meetings to Capitol Hill as lawmakers prepare legislation targeting federal funding for agencies that deploy the technology while communities across the country reconsider its use.

Law Enforcement Groups Push for CLARITY Act Changes, White House Remains Skeptical

Law enforcement organizations, with backing from prominent Democrats, have put forward proposed amendments to the CLARITY Act that could simplify the prosecution of certain cryptocurrency software developers. However, White House officials have indicated that these suggestions do not meet their expectations.

Patrick Witt, a cryptocurrency advisor to former President Trump, criticized the proposal, asserting that claims of “productive negotiations” with the White House and Treasury were inaccurate. He stated that the administration had clearly communicated its stance to Senator Catherine Cortez Masto for weeks, and the latest revision was “not even close” to satisfying their requirements.

According to a report by Politico, two major organizations representing U.S. prosecutors have submitted revised language to the White House in an effort to break a months-long impasse over the CLARITY Act.

Senator Masto, in a statement, described the new language as the “culmination of productive negotiations with law enforcement, the White House, and Treasury,” expressing optimism about resolving the issue.

The proposed changes primarily target the Blockchain Regulatory Certainty Act (BRCA), with the revised text removing provisions that could offer developers some protection from criminal prosecution. The core of the disagreement centers on whether law enforcement should hold crypto developers accountable for illicit activities occurring on the platforms they create.

The Trump administration has previously argued for protecting builders who do not handle customer funds, aiming to foster innovation. Conversely, critics and law enforcement groups have warned that the current wording could inadvertently facilitate unchecked financial crimes.

New York Attorney General Letitia James has echoed these concerns, recently stating that the CLARITY Act could undermine state efforts to combat crypto fraud by limiting the state’s ability to hold digital asset firms accountable.

However, not all parties oppose the latest amendments. The Fraternal Order of Police, the largest police organization in the U.S., has withdrawn its previous objections and now supports the cryptocurrency bill, having previously raised concerns about the BRCA.

The Politico report also indicates that several other groups have lent their support to the legislation, including the National Organization of Black Law Enforcement Executives and the Federal Law Enforcement Officers Association.

Last month, over 160 former national security, intelligence, and other officials penned a letter to the Senate in favor of the bill, arguing that it would bolster efforts to combat illicit finance within the cryptocurrency sector.