Amidst the rise in scams and illicit activities within the crypto ecosystem, Tennessee Governor Bill Lee has passed a law for crypto kiosks.
Effective on the 1st of July, the law will prohibit all crypto automated teller machines (ATMs) and crypto kiosks operated in the southeastern United States.
Passed on the 13th of April, House Bill 2505 would give companies a few weeks to meet the required rules and standards.
Implications of House Bill 2505
To enforce strict compliance, authorities will charge any organization that installs a crypto kiosk after the 1st of July with a Class A misdemeanor.
The latter will guarantee that perpetrators of the law will be subject to a $2,500 fine and 11 months and 29 days of imprisonment.
With the law now in effect, regulators will scrutinize all 570 Bitcoin [BTC] ATMs in Tennessee, according to the latest data from CoinATMRadar.
Back in March, Middle Tennessee law enforcement reported nearly $4 million in losses tied to crypto kiosk scams. That surge in fraud pushed the governor to take action.
Bill sponsors provide their perspective
House Bill 2505 sponsor and House Speaker Cameron Sexton said,
Virtual currency kiosks have become a gateway for scammers to exploit Tennesseans, especially our seniors, with little hope of recovering their money once it’s gone.
Echoing similar sentiments, another sponsor of the bill, State Rep. Jay Reedy, added,
By eliminating these machines, we’re shutting down one of the most common tools used in these schemes and taking a major step toward stopping them.
Moreover, the FBI’s 2025 Internet Crime Report highlighted rising losses linked to cryptocurrency kiosks, further confirming the sentiment.
According to the report, 13,460 complaints were filed in 2025, resulting in $389 million in losses. Compared to 2024, the complaints had increased by 23%, while losses rose by 58%.
The crypto kiosk ban is not exclusive to Tennessee
Needless to say, Tennessee is not the only state to take this action. Haverhill, a city in Massachusetts, United States, also implemented a complete ban on cryptocurrency ATMs in April 2026.
Additionally, in March 2026, central Wisconsin implemented a $1,000 transaction limit for crypto ATM transactions. Afterward, in February 2026, the state of Minnesota prohibited the use of cryptocurrency ATMs.
Similar patterns are observed as the state of Indiana contemplates ATM bans.
Therefore, the necessity for U.S. states to establish more stringent regulations and outright prohibitions to combat fraud is clear when these episodes are taken together.
Final Summary
- Tennessee has joined the ranks of other states in the United States in prohibiting the operation of approximately 570 crypto kiosks.
- The action of Tennessee Governor Bill Lee was significant, as nearly $4 million was lost in crypto kiosk scams.