Forest Lake Fights Back: Cryptocurrency Scams Under the Spotlight

The Forest Lake police have announced that victims have lost more than $300,000 in the last two years to cryptocurrency scammers. The scams most commonly involve the utilization of cryptocurrency kiosks, which normally are found at convenience stores. The Forest Lake City Council met on Monday night to discuss action that can be taken to protect the community from these growing fraud schemes.

While most individuals buy cryptocurrency to utilize it for payment or investment purposes, fraudsters have been targeting such transactions to defraud victims.

How the Scams Work

The scam starts with a simple phone call in the name of a police officer or government official. Scammers convince the victims that they committed some illegal action and to avoid any kind of punishment they ask for money. These scammers even manipulate the victims to cheat on bank tellers and police officers in case they ask any questions. Ultimately, they use aggressive pressure, forcing the victims to send money through cryptocurrency kiosks.

Investment fraud schemes are another growing concern. Scammers persuade victims to send funds with promises of big investment returns. Unfortunately, most victims never recover their money. 

Forest Lake Detective Nathan Olstad shared, “The employees will even see people come in all confused standing at the kiosk and they’ll ask them questions like, ‘Do you know what you’re doing? Do you need help?’ And they’re so wrapped up in the scam that they just brush everyone off.”

Other Minnesota Cities Facing the Same Problem

Forest Lake is not alone in dealing with these scams. The City of Woodbury has reported $6.6 million in losses from cryptocurrency fraud since 2021. In 2023, White Bear Lake reported losses of about $125,000. Other nearby cities like Stillwater, Hastings, and Cottage Grove are also considering banning these kiosks altogether to protect residents.

A Growing National Issue

The problem extends far beyond Minnesota. In 2023, the Federal Bureau of Investigation (FBI) received over 5,500 complaints against cryptocurrency kiosks with total losses of $189 million. 

Over 70000 complaints were recorded across the whole country with a loss of $5.6 billion reflecting a 5% rise compared to the previous year. 

According to the Federal Trade Commission, losses from the schemes are a tenfold increase since 2020. In 2023 Minnesota, police reported about 976 complaints and a loss of $75 million. 

What the City Council Is Considering

The Forest Lake City Council is leaning toward passing an ordinance rather than banning kiosks completely. The proposed ordinance would require kiosk owners to register and pay a fee between $2,000 and $3,000. Kiosks would need clear signage and security cameras to deter scammers. If any kiosk is involved in three or more reported fraud incidents in the past year, the operator would not be allowed to register.

The council will revisit this issue and likely discuss the ordinance further at its March 24 meeting.