Earlier this spring, Minnesotans became crypto-unbanked without realizing it.

Three laws passed this session combine to restrict financial privacy, the right to contract freely, and the right to spend without government supervision more than the sum of their parts. Legislators masqueraded their crackdown as consumer protection measures. Please don’t fall for it.

First up is the kiosk ban. This law, Chapter 65 (S.F. 3868), bans cryptocurrency kiosks statewide effective August 1st. Operators must decommission machines and surrender customers’ holdings by December 31st. Legislators claim they’re banning cryptocurrency kiosks to combat fraud. The reality of life without kiosks is different: say goodbye to one of Minnesota’s last discreet, USD-convertible cryptocurrency on-ramps.

Crypto kiosks aren’t perfect. But they offer one indispensable benefit: converting USD to cryptocurrency with minimal identification. You can walk up to a kiosk with cash, swap your money for crypto, and walk away without surrendering  the bulk of your privacy. Not everyone needs to be completely anonymous. But victims of domestic abuse, activists, sources for journalists, residents of underserved communities who are disproportionately unbanked, and anyone else who simply values financial privacy do need that option. Until this bill passed, Minnesota was one of the states that offered it. No more.

Which leads us to the question: if you can’t access cryptocurrency privately in Minnesota, how will you access it?

Through a bank. Another law from this session, Chapter 93 (H.F. 3709), legalized custody of cryptocurrency by state-chartered banks and credit unions. It’s styled as helping customers access cryptocurrency services. In reality, it codifies a shift from private to institutional custody. Customers exiting cryptocurrency kiosks may have the option to direct their payouts into a wallet of their choosing rather than taking USD. And while kiosk operators can offer that choice at the time of dissolution, it’s no consolation to cryptocurrency users losing a private USD on-ramp in favor of a bank-controlled alternative.

Oh, and when your bank holds your cryptocurrency? It’s non-fiduciary. Section 1 expressly permits banks and credit unions to provide cryptocurrency custody services in a non-fiduciary capacity. Fiduciary institutions have a duty to act in your best interest. Non-fiduciaries do not. Minnesota wants you to bank your crypto at an institution that can put its own interests above your own. If that bank freezes your account? Too bad. Traditional bank accounts aren’t immune to government interference. They lend themselves to it. Accounts get frozen all the time by court orders, subpoenas, agency demands, or any number of monitoring policies banks choose to enforce. 

…But wait, there’s more! Chapter 97 (S.F. 4760) prohibits prediction markets statewide. It applies felony criminal sanctions not just to prediction market operators, but also to anyone who “provides supportive services to a prediction market or consumer knowing that the services will be used to… transfer money, or make or process payments for the purpose of allowing consumers to make wagers or to settle wagers made by consumers…” Payment processors. Wallet providers. Cryptocurrency exchanges that process transactions involving a prediction market.

Why? Because cryptocurrency is a prominent method for prediction markets to move money. Processing payments to or from crypto wallets you know are connected to a prediction market becomes a felony if you operate in Minnesota. Period. Full stop. Will your company take that risk on your users? Some compliance teams will have one answer when faced with felony exposure via customer activity: Geofence Minnesota users out.

Eliminate private alternatives. Pressure users into government-reported services. Chill potential competition through ambiguity and overreach. The result is a financial ecosystem where every cryptocurrency transaction is just a click away for prying eyes.

Minnesota’s 2026 cryptocurrency package is exactly that kind of legislation. What was taken from Minnesotans was never announced as a taking. It was announced as protection. Pretending it’s for our own good doesn’t make it so. That’s how civil liberties die.