Tennessee Becomes Second U.S. State to Ban Bitcoin and Crypto ATMs

Tennessee Governor Bill Lee signed House Bill 2505 on April 13, making Tennessee the second U.S. state after Indiana to ban Bitcoin ATMs, with the law taking effect July 1. The legislation, co-sponsored by Republicans Cameron Sexton and Jay Reedy and passed unanimously in February, classifies owning or operating crypto ATMs as a Class A misdemeanor and extends liability to businesses hosting the machines. The ban targets fraud prevention after Americans over 60 lost $257 million to Bitcoin ATM scams in 2024, a 58% year-over-year increase, with Tennessee victims losing $4 million to overseas scammers posing as law enforcement around March. Tennessee currently hosts 651 Bitcoin ATMs, mostly clustered around Nashville, all of which must cease operations or face criminal prosecution.

Tennessee's Ban on Bitcoin ATMs and Legislative Action

• ▪House Bill 2505 classifies violations as a Class A misdemeanor in Tennessee
• ▪Jay Reedy said crypto ATMs have given scammers a fast and easy way to target Tennessee citizens and scare them into draining their savings
• ▪House Bill 2505 was co-sponsored by Republican state representatives Cameron Sexton and Jay Reedy
• ▪Tennessee hosts 651 Bitcoin ATMs according to Coin ATM Radar
• ▪Cameron Sexton said Bitcoin ATM kiosks have become a gateway for scammers to exploit Tennesseans, especially seniors
• ▪A majority of Tennessee's Bitcoin ATMs are clustered around Nashville
• ▪Class A misdemeanors in Tennessee are on par with simple drug possession and domestic assault
• ▪Tennessee Governor Bill Lee signed House Bill 2505 into law on April 13
• ▪Tennessee's Bitcoin ATM ban is set to take effect on July 1
• ▪House Bill 2505 was introduced in Tennessee in February

Bitcoin ATMs as Vectors for Fraud Targeting Elderly Americans

• ▪Americans under 30 lost $6.6 million to Bitcoin ATM scams in 2025
• ▪Tennessee victims lost $4 million to overseas scammers posing as law enforcement around March
• ▪Americans aged over 60 lost $257 million to scams involving Bitcoin ATMs in 2024 according to FBI numbers
• ▪Victims defrauded while using Bitcoin ATMs often have little hope of recovering their money
• ▪Bitcoin ATM scam losses for Americans aged over 60 increased 58% year-over-year
• ▪Federal authorities have identified Bitcoin ATMs as a vector for committing fraud against the elderly

Nationwide Regulatory Response to Crypto ATM Scams

• ▪One Indiana law enforcement official said the number of Bitcoin ATM scam reports has doubled each year for the last four years
• ▪Indiana became the first U.S. state to impose a sweeping ban on Bitcoin ATMs in March

Perspective of Crypto ATM operators and hosting businesses in Tennessee

• ▪House Bill 2505 extends criminal liability beyond crypto ATM operators to businesses that host the machines on their premises
• ▪Tennessee's 651 Bitcoin ATM operators must shut down their machines by July 1 to avoid criminal prosecution