Amid the rise in scams and illegal activities within the crypto ecosystem, Tennessee Governor Bill Lee has passed a bill for crypto kiosks.
Effective July 1, the law bans all crypto ATMs (ATMs) and crypto kiosks operating in the southeastern United States.
House Bill 2505, passed April 13, would give companies a few weeks to comply with required rules and standards.
Implications of House Bill 2505
To enforce strict compliance, authorities will charge any organization that installs a crypto kiosk after July 1 with a class A misdemeanor.
The latter guarantees that violators of the law will receive a fine of $2,500 and a prison sentence of 11 months and 29 days.
With the law now in fact, regulators will scrutinize all 570 Bitcoin [BTC] ATMs in Tennessee, according to the latest data from CoinATMRadar.
In March, law enforcement agencies in Middle Tennessee reported nearly $4 million in losses due to crypto kiosk scams. That wave of fraud prompted the governor to take action.
Bill sponsors give 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 getting their money back once it runs out.
Echoing similar sentiments, another sponsor of the bill, state Rep. Jay Reedy, added:
By eliminating these machines, we eliminate one of the most common tools used in these schemes and take a big step toward stopping them.
Additionally, the FBI’s Internet Crime Report 2025 highlighted rising losses associated with cryptocurrency kiosks, further validating the sentiment.
According to the report, 13,460 complaints were filed in 2025, resulting in losses of $389 million. Compared to 2024, complaints have increased by 23%, while losses have increased by 58%.
The ban on crypto kiosks is not exclusive to Tennessee
Needless to say, Tennessee is not the only state taking this action. Haverhill, a city in Massachusetts, United States, also implemented a complete ban on cryptocurrency ATMs in April 2026.
Additionally, central Wisconsin implemented a $1,000 transaction limit for crypto ATMs in March 2026. Then, in February 2026, the state of Minnesota banned the use of cryptocurrency ATMs.
Similar patterns are being observed as the state of Indiana considers an ATM ban.
Therefore, the need for US states to introduce stricter regulations and outright bans to combat fraud becomes clear when these episodes are taken together.
Final summary
- Tennessee has joined the ranks of other states in the United States in banning the operation of approximately 570 crypto kiosks.
- Tennessee Governor Bill Lee’s action was significant, as nearly $4 million was lost in crypto kiosk scams.