Sterling Heights announces new rules to prevent cryptocurrency fraud

New rules to prevent Cryptocurrency fraud

An ordinance to crack down on fraudulent crypto in Sterling Heights. There’s a new ordinance that’s now passed there because police say they’ve dealt with far too many cases of fraud.

STERLING HEIGHTS, Mich. (FOX 2) - An ordinance was made to crack down on fraudulent crypto in Sterling Heights. The new ordinance was passed because police say they’ve dealt with far too many cases of fraud.

Timeline:

Officials started keeping track of cases on Jan. 1. 

Police say they’ve investigated 23 fraud cases tied to the city’s 27 machines, with losses exceeding $542,000, with seniors making up most victims, but the FBI estimates it could be more than that, maybe as much as a million just in Sterling Heights.

Sterling Heights City Council introduced a new ordinance to strengthen regulations on virtual currency machines, including Bitcoin ATMs, in response to a sharp rise in crypto-related fraud. The ordinance would require business and operator licensing, annual fees, ID verification for users, fraud warnings, transaction receipts, customer service hotlines, limits for first-time users, and routine inspections.

Dig deeper:

Existing operators must comply by March 31, 2026, with the types of scams:

"One being a romance scam where somebody is texting or a Facebook page, and they text back and forth person needs money via bitcoin so they can come to the country. Some are giveaways," said Sterling Heights Police Captain Colleen Hopper.

Operators must also keep transaction and service records for at least 90 days while protecting personal data. 

The city says the move is especially urgent during the holiday season, when scams typically spike and a new Police Department Crypto Task Force has been created to combat the problem.