Tennessee Bans Bitcoin ATMs Statewide From July 1

Tennessee has outlawed Bitcoin ATMs across the state, making it a criminal offense to own or operate the machines beginning July 1. Governor Bill Lee signed House Bill 2505 into law on April 13. The bill was introduced in February and is co-sponsored by Republican representatives Cameron Sexton and Jay Reedy.

House Bill 2505 requires operators to remove or disable kiosks that allow customers to buy digital assets with cash by July 1. Violations are classified as a Class A misdemeanor under Tennessee law. The law covers kiosks that facilitate purchases of Bitcoin or other digital assets with cash and does not carve out machines that offer only educational information or operators that do not handle on-site cash transactions.

Statewide there are 651 Bitcoin ATMs, with many clustered around Nashville. The machines are commonly found in gas stations, convenience stores, smoke shops and liquor stores.

Lawmakers cited an increase in fraud involving the kiosks as the reason for the ban. The FBI reported that in 2025 Americans age 60 and older lost $257 million to scams involving Bitcoin ATMs, a 58% increase from the prior year. People under 30 lost $6.6 million to similar scams in 2025. Local officials also warned of a scheme in which victims lost about $4 million to overseas fraudsters impersonating law enforcement.

“The kiosks have become a gateway for scammers to exploit Tennesseans, especially our seniors,” Sexton said. Reedy described the kiosks as providing a fast and easy method for fraudsters to pressure victims into sending funds.

Indiana enacted a statewide ban on Bitcoin ATMs in March, the first state to do so. Other states have pursued measures such as capping transaction amounts and requiring refunds to victims. Minnesota lawmakers have considered legislation that would ban the machines statewide.

Industry incidents have added to concerns about kiosk security. Bitcoin Depot Inc. disclosed a March 23 breach in which attackers gained access to settlement account credentials and transferred 50.9 BTC, about $3.7 million at the time, from company-controlled wallets. The company reported it activated incident response protocols after discovering the breach.

Operators who do not comply with the July 1 removal or disablement requirement could face criminal charges under the new Tennessee law.