At the City Council Legal Affairs Sub-Committee meeting, crypto coins and concerns were discussed, and the Committee ultimately passed an ordinance to ban Bitcoin machines, like Coinme and CoinGenie, in Peabody. That ban is not yet in effect.
Mayor Ted Bettencourt spoke first on this matter at the meeting on Oct. 23 before giving the floor to experts, like District Attorney Paul Tucker and Police Chief Tom Griffin, as he penned the ordinance.
“I’m always amazed by the frauds and the schemes and the ways in which criminals try to rob from our citizens — and the lengths that they go to to pull these types of frauds on our residents,” Bettencourt said. “Cities and towns have to do what we can to support our law enforcement, to support our district attorney’s office, our police department, and I’m very proud to help move this along.”
Bettencourt said the ordinance presented to Council was one that took influence from the City of Gloucester’s.
Tucker then took the mic to discuss “the real epidemic” and “what’s happening in the world of scamming and fraudulent activity.”
“The issue that we have before us has to do with these Bitcoin kiosks, and they are what our own Federal Trade Commission has described as ‘a payment portal for scams.’ Our own FTC has called it ‘a payment portal for scams,’” Tucker emphasized. “This is a preferred method for scammers to actually separate money from people who don’t even sometimes realize that they’ve been scammed until they’re contacted by the police department.”
Tucker said that “the most vulnerable folks in our society” are being targeted, “particularly the elderly.” He called it “a very insidious problem” and noted some of the methods scammers are using, like: impersonating federal agents, developing romantic relationships to garner trust, and inserting viruses onto people’s computers.
Regarding the computer scams, Tucker explained just how convincing the scammers are.
“We had one recently that (the scammers) said they were trying to catch people who were involved in child pornography, and if the people that they were trying to scam didn’t help, there was a chance they could also get ensnared in it, and they’d never be able to clean their name,” Tucker shared.
He added, “We’ve had so many, particularly elderly people, that will go to the bank literally while the scammers are still in their ear on the phone, and they’re so persuasive.”
Tucker emphasized that “the financial losses are generally irreversible.” He said, once that money is fed into the Bitcoin machine, the chances of getting it back are roughly 1-2%.
“We estimate, in Essex County alone, in this calendar year, reported losses are about $11 million — and that’s reported,” Tucker said, emphasizing that for many reasons — such as shame, fear of family members knowing, etc. — that figure likely only represents about one third of the actual losses.
Tucker said Peabody would be the third community in the Commonwealth to pass an ordinance to ban crypto kiosks, the first being Gloucester, the second Waltham. He added that some other communities, like Marblehead and Beverly, are currently looking into enacting similar ordinances.
“Every day, somebody’s getting scammed. It’s very frustrating to us in the DA’s office and local detectives as well… I will say that there is a bill pending in the legislature. It’s far from complete… That’s going to take a long time to wend its way through the legislative process if it does, in fact, make it to the end line,” Tucker shared.
He continued by explaining that there is not currently any federal or state oversight on Bitcoin regulations, and he added that the Bitcoin industry “will fight back” because “they don’t want any laws at all.”
“As somebody described it to me, this is the ‘Wild West’ of financial scams,” Tucker said.
Tucker commended the City for considering the ordinance and added, “This is something that I think the residents of Peabody will get an immediate benefit from.”
Griffin spoke next briefly to echo Tucker’s thoughts and add, “I think moving on this as soon as we can is important, and I would just really appreciate the support from the Council on it.”
A point of conversation for the Council was learning the figures. In Peabody, the estimate is that there have been 15 victims since 2023, totaling $147,000 in money lost to scammers. Further, an Iowa study was mentioned that stated that 98% of the deposits into Bitcoin machines are scams.
Also during the conversation, Council questioned whether a City-wide ban on Bitcoin machines would be all that impactful to Peabody residents, given they could just go to a Bitcoin kiosk in Salem or another neighboring community.
“With our elderly population, they’re comfortable in their own city,” Tucker said. “I think that they would find it easier to go to a store that’s familiar to them, using a machine that looks familiar, such as an ATM. I think that added layer of having them go outside of their own city, I think that’s another decision point that they may be able to say there’s something wrong with this (and realize they’re being scammed).”
Prior to the vote, the Council agreed to change the timeline of when all machines must be removed from 30 days to seven days, meaning all Bitcoin machines will be removed from the City of Peabody in seven days from when the ordinance takes effect.
After some technical concerns regarding where the ordinance would fall in the City’s Code, the Sub-Committee voted unanimously in the ordinance’s favor. Later that evening during the regular City Council meeting, the Council voted unanimously to adopt and advertise the ordinance.
The City of Peabody currently has many crypto machines; their locations are below:
- Northshore Mall at 210 Andover St. has a Coinflip machine
- Shaw’s at 114-128 Essex Center Dr. has a Coinme machine
- Springhill Suites at 43 Newbury St. has a Liberty X machine
- J&H Quick Stop at 129 Newbury St. has a Coinmover machine
- Duddy’s Liquor at 134 Newbury St. has an Unbank machine
- Speedway at 545 Lowell St. has a Liberty X machine
- Big Y at 637 Lowell St. has a Coinme machine
- CVS Pharmacy at 637 Lowell St. has a Coinme machine
- DEV Convenience at 24 Lake St. has a Liberty X machine
- CVS Pharmacy at 85 Lynnfield St. has a Liberty X machine
- Richdale at 139 Lynnfield St. has a Bitcoin Depot machine
- A One Market at 50 Central St. has a Coinmover machine
- Bavaro Liquors at 12 Foster St. has a CoinGenie machine
- 4 Your Convenience at 150 Main St. has a Coinflip machine
- CVS Pharmacy at 174 Main St. has a Liberty X machine
- New England Meat Market at 60 Walnut St. has a Coinbridge machine
- Stop & Shop at 19 Howley St. has a Coinme machine
- Gardner Variety at 44 Margin St. has a Coinhub machine
Additionally, Bitcoin Depot allows people to purchase crypto currency through the checkout at Speedway at 545 Lowell St., 7-Eleven at 23 Newbury St., and 7-Eleven at 100 Lynn St.
