Tennessee has become the second U.S. state to outright ban crypto ATMs, with Governor Bill Lee signing House Bill 2505 into law on April 13. The bill passed both chambers unanimously and will take effect July 1, making it a misdemeanor to operate or host the machines anywhere in the state.
Legislative Details and Scope
House Bill 2505 prohibits the installation or operation of “virtual currency kiosks,” commonly known as bitcoin ATMs, which are often found in gas stations, convenience stores, and shopping malls. The law applies to both crypto ATM operators and businesses that allow them on their property. The bill’s sponsor and four cosponsors were all Republicans, and it was officially codified on Thursday following its April 13 signing.
Penalties and Enforcement
Violations of the Tennessee ban carry a Class A misdemeanor classification, which can result in penalties of up to one year in prison and a $2,500 fine.
State and National Landscape
Tennessee follows Indiana, which became the first state to enact a full statewide crypto ATM ban last month. According to an AARP report, thirty states have introduced bills related to crypto kiosks this year alone, bringing the total number that have passed laws to 20 as of 2026. Among those states with existing regulations, many have added provisions requiring crypto kiosk operators to hold a state license, set daily transaction limits, and in some cases offer refunds to scam victims. A majority of states already have rules in place that deter these machines from being used to facilitate scams, but only two have implemented blanket bans.
Crypto Kiosk Fraud Mechanisms
Crypto kiosks themselves are not inherently fraudulent—they function as point-of-sale machines that let users buy and sell cryptocurrencies for cash and transfer funds to external wallet addresses. However, international scammers have used them for years to facilitate billions of dollars in fraud.
One common scenario involves scammers posing as police or government officials, telling victims they face arrest or owe a fictitious debt. They then direct victims to withdraw cash, convert it into crypto, and send it via a kiosk. According to FBI data, cryptocurrency kiosks were tied to nearly $390 million in reported losses in 2025 alone, with older Americans accounting for a disproportionate share of victims.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
US Sanctions Iran-Linked Crypto Wallets; Tether Freezes $344 Million in USDT
Gate News message, April 26 — U.S. Treasury Secretary Scott Bessent announced that the federal government is sanctioning multiple wallets linked to Iran as part of efforts to increase economic pressure on the country. The move follows Tether's decision on Thursday, April 24, to freeze $344 million w
GateNews20m ago
Two South Korean Army Officers Sentenced to 2 Years for Illegal Crypto Exchange Operations and Drug Money Laundering
Gate News message, April 26 — Two active-duty South Korean Army officers in their 30s from the Special Warfare Command were each sentenced to two years in prison and fined 54.69 million Korean won by Changwon District Court on April 26 for operating an unlicensed virtual asset exchange and
GateNews23m ago
Brazil Bans Kalshi, Polymarket Citing Investor Protection Concerns
Brazil has enacted a sweeping ban on prediction markets and betting platforms, according to local media and government filings. The two leading prediction markets, Polymarket and Kalshi, were inaccessible to researchers based in the country following the ban.
Regulatory Framework and Scope
The
CryptoFrontier1h ago
SEC Chair Paul Atkins Announces Digital Asset Classification Framework with CFTC
Gate News message, April 26 — U.S. Securities and Exchange Commission Chair Paul Atkins has reaffirmed efforts to advance "Project Crypto" and announced a joint initiative with the Commodity Futures Trading Commission (CFTC) to establish a digital asset classification framework that will clarify
GateNews1h ago
Tennessee, United States, fully bans the use of cryptocurrency ATMs
Tennessee Governor signs Bill 2505, fully banning the installation and operation of cryptocurrency ATMs. Violators are guilty of a Class A misdemeanor, and merchants are also not allowed to permit the devices to be placed in business premises. This move is intended to reduce the risk of fraud and money laundering; in the U.S., losses related to cryptocurrency ATMs in 2025 were nearly $390 million, driving multiple states to accelerate regulation.
ChainNewsAbmedia3h ago
Trump Warns Banks Against Blocking Crypto Legislation, Says Digital Assets Now Mainstream
Gate News message, April 26 — Former President Donald Trump warned the banking industry against obstructing crypto legislation at a private event held Saturday at Mar-a-Lago in Palm Beach, Florida, attended by approximately hundreds of TRUMP token holders. Trump stated: "The White House will not let
GateNews3h ago
