Tennessee Criminalizes Crypto ATMs in Sweeping Statewide Ban
Tennessee has moved from regulating crypto kiosks to banning them outright.
Governor Bill Lee signed House Bill 2505 into law on April 13, making it a criminal offense to operate or host Bitcoin and other crypto ATMs anywhere in the state. The ban takes effect July 1 and puts Tennessee alongside Indiana, which passed a similar law weeks earlier.
The measure targets what lawmakers describe as a growing fraud pipeline. These machines, often placed in gas stations, convenience stores, and malls, allow users to convert cash into cryptocurrency and send it to external wallets. That simplicity has made them useful for scammers.
State officials say the pattern is consistent. Victims receive urgent messages from people posing as law enforcement or government agencies. They are told to withdraw cash, deposit it into a crypto kiosk, and send funds to resolve a fabricated issue. Once the transaction clears, recovery is unlikely.
Federal data shows why states are reacting. The Federal Bureau of Investigation reported that Americans over 60 lost $257 million to crypto ATM scams last year, with losses rising sharply year over year. Total reported losses tied to these kiosks approached $390 million across all age groups.
Tennessee's law goes further than most. Violations are classified as a Class A misdemeanor, exposing operators and even businesses hosting the machines to potential jail time and fines. The liability shift is notable, extending beyond operators to property owners who allow the machines on site.
The state currently hosts hundreds of these kiosks, many clustered around Nashville. All must be removed or shut down before the July deadline.
Elsewhere, lawmakers are taking a less absolute approach. Roughly 20 states have passed laws focused on licensing, transaction limits, and consumer protections. Others are considering similar frameworks rather than full bans.
Tennessee's move signals a sharper turn. Instead of trying to control how crypto ATMs operate, some states are deciding the risks outweigh the benefits.