Regulatory pressure on the cryptocurrency industry mounted on July 18, 2026, as two separate developments highlighted the growing push for tighter oversight at both local and federal levels. The El Paso City Council moved to impose mandatory scam warnings on Bitcoin ATMs, while the Institute on Taxation and Economic Policy (ITEP) urged Congress to reject any special tax breaks for digital assets.
In Texas, the El Paso City Council is weighing an ordinance that would require cryptocurrency kiosk operators to display conspicuous fraud alerts in English and Spanish before every transaction. According to a KFOR report, the draft rules also mandate a 60-second "cooling off" period after the warning appears, along with a toll-free scam hotline number posted on each machine. Kiosk operators would need to register with the city and provide a local contact for law enforcement referrals. The measure responds to a sharp rise in scams where victims are duped into depositing cash at kiosks, often by impersonators posing as officials or tech support. The Federal Trade Commission (FTC) reported that crypto kiosk scam losses exceeded $110 million in 2023, with elderly residents particularly vulnerable.
Simultaneously, ITEP released a report titled "Crypto Tax Breaks: A Bad Deal for American Taxpayers," directly challenging bills like the Digital Asset Tax Clarity Act and the Crypto Tax Fairness Act. The nonpartisan think tank contends that proposals to exempt small transactions from capital gains taxes or to allow like-kind exchange treatment would primarily benefit wealthy investors and drain billions from federal revenue. "The existing tax code is fully capable of handling cryptocurrency," the report states, warning that special exemptions would open loopholes for tax avoidance.
The ITEP paper arrives as Congress debates several crypto tax reform measures, and its findings are expected to stiffen opposition among lawmakers wary of budget shortfalls. Industry groups such as the Blockchain Association and Coin Center have yet to issue formal responses, though some advocates argue that simplified tax treatment is essential for mainstream adoption. As of midday, Bitcoin was trading at $68,400, down 1.2%, while Ethereum held near $3,210 — moves analysts attributed more to macroeconomic factors than the day's regulatory headlines.
Both the El Paso proposal and the ITEP report reflect a broader trend of increased scrutiny at all levels of government. If the kiosk rules pass, El Paso would join a handful of cities with such measures, and the Texas legislature may consider statewide regulation next session. On the tax front, the report's strong language is likely to slow momentum for crypto-friendly tax legislation, keeping the current "property" treatment—and its rigorous reporting requirements—firmly in place.
