Tennessee, United States, fully bans the use of cryptocurrency ATMs

Tennessee Governor Bill Lee has signed House Bill 2505, officially declaring a statewide ban on the installation and operation of cryptocurrency ATMs (Cryptocurrency ATM). The bill was passed unanimously by both chambers, making Tennessee the second U.S. state—after Indiana—to fully prohibit cryptocurrency terminal equipment nationwide.

Strict rules restrict the installation of cryptocurrency kiosk machines

House Bill 2505 clearly prohibits the installation or operation of “Virtual Currency Kiosks.” The new ban not only targets cryptocurrency ATM operators, but also extends responsibility to merchants that allow the devices to be placed on their business premises. Cryptocurrency ATMs are commonly installed in public places such as gas stations, convenience stores, and shopping centers. After the bill takes effect, they may not continue operating; any act that violates the ban will be classified as a Class A Misdemeanor, and violators could face up to one year in imprisonment as well as a $2,500 fine. This new regulation reflects the Tennessee government’s focus on the risks of cryptocurrency transactions in public places, and its attempt to sever footholds associated with cryptocurrency scam activities through strict measures.

Cryptocurrency ATMs allow users to buy and sell virtual assets with cash and transfer funds to external electronic wallet addresses. However, their immediacy and anonymity make them a financial tool for international fraud organizations. Common tactics include scammers impersonating police officers or government officials, claiming that the victim is facing legal proceedings or debt problems, and requiring the victim to withdraw a large amount of cash. After that, the victim is instructed to use such cryptocurrency ATMs to purchase cryptocurrency and send it to a designated address. Once the victim completes the transfer, law enforcement often finds it difficult to recover the funds. This type of scam method that combines physical machines with social engineering has created a serious public safety threat.

Cryptocurrency ATMs cause $390 million in losses nationwide

U.S. Federal Bureau of Investigation statistics reveal the property damage caused by cryptocurrency ATMs. As early as 2025, the total losses in the United States related to such devices were already nearing $390 million. Elderly populations account for a significant share of victims, prompting states to speed up their review of relevant regulatory laws. According to a report from the American Association of Retired Persons (AARP), in 2026 it is expected that 20 states will pass regulations related to cryptocurrency ATM services, and 30 states have already introduced related bills. Although most states choose to adopt relatively more moderate regulatory measures—such as requiring operators to hold dedicated licenses, setting daily transaction limits, and establishing victim refund mechanisms, among others—Tennessee and Indiana have adopted a much stricter comprehensive ban strategy.

This legislation was initiated by Republican state lawmakers and received support from four co-sponsors. The bill was passed unanimously in both chambers without objection, showing that Tennessee has reached a high level of bipartisan consensus on protecting residents’ asset safety and preventing money-laundering risks. Legislators believe that while buying cryptocurrency is not illegal, ATM equipment is likely to become an exit point for scam funds due to the lack of identity verification mechanisms (KYC). By completely banning such self-service ATMs, it can significantly reduce criminals’ opportunities to target vulnerable groups with scams.

This article, “Tennessee, the United States, Completely Bans the Use of Cryptocurrency ATMs,” first appeared on Chain News ABMedia.