Bitcoin Depot Shutters as Crypto ATMs Face More Scrutiny

Bitcoin Depot, the world’s largest operator of cryptocurrency ATMs, is shutting down after declaring bankruptcy, according to a Monday (May 18) press release.

The company is seeking Chapter 11 bankruptcy protection and will begin winding down its business and selling its assets, the release said.

Bitcoin Depot CEO Alex Holmes said in the release that the bankruptcy is happening despite efforts to improve fraud protection measures for customers by offering “enhanced identity verification, customer fraud warnings and … lower transaction limits…”

“Nevertheless, the regulatory environment for BTM operators has shifted significantly,” Holmes said in the release. “States have imposed increasingly stringent compliance obligations, including new transaction limits, and in some jurisdictions, outright restrictions or bans on BTM operations; and operators have faced increasing litigation and regulatory enforcement. These developments have materially affected Bitcoin Depot’s business and financial position. Under these circumstances, the company’s current business model is unsustainable.”

The news came two months after Connecticut’s banking regulator suspended Bitcoin Depot’s money transmission license. The state alleged that the company had violated compliance requirements, overcharging customers and failing to refund fraud victims.

Bitcoin Depot was also sued in Massachusetts after investigators allegedly found that more than half of the money flowing through its kiosks in the state between August 2023 and January 2025 was scam related. The company has said it disputes claims that it facilitates scams and that it works with law enforcement to prevent financial crime.

The Federal Trade Commission said that as crypto ATMs have become more prominent, they have turned into a “payment portal for scammers.”

The regulator said in 2024 that scammers were increasingly turning to bitcoin ATMs to carry out government impersonation, business impersonation and tech support scams.

However, crypto industry proponents said bans on the ATMs won’t prevent fraud and could hurt consumers.

“Eliminating them may reduce certain fraud vectors, but it also removes one of the last public-access tools for financial privacy and cash-to-crypto conversion,” Alex Davis, founder and CEO of blockchain company Mavryk, said in an interview with CNBC earlier this year. “The question isn’t whether crypto ATMs should exist; it’s whether society is comfortable with a future where every dollar must pass through a fully surveilled, fully permissioned gatekeeper.”

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