Tennessee Becomes Second State to Outlaw Bitcoin, Crypto ATMs

Tennessee has become the second U.S. state to outlaw Bitcoin ATMs, making it a criminal offense in the Volunteer State to own or operate the machines that federal authorities have identified as a vector committing fraud against the elderly.

Whether operators’ kiosks allow customers to purchase Bitcoin or other digital assets with cash, they have until July 1 to pull the plug under House Bill 2505, which Tennessee Governor Bill Lee signed into law on April 13 following the legislation’s introduction earlier this year.

The legislation was co-sponsored by Republican state representatives Cameron Sexton and Jay Reedy. In a March statement, Sexton said the kiosks “have become a gateway for scammers to exploit Tennesseans, especially our seniors.”

Sexton noted that victims defrauded while using Bitcoin ATMs often have little hope of recovering their money once it’s gone. That was around the time that local authorities warned of a scam where victims had lost $4 million to overseas scammers posing as law enforcement.

Reedy, a certified master beef producer, said “Crypto ATMs have given scammers a fast and easy way to target our citizens and scare them into draining their savings.”

The two-page bill, which was introduced in February, classifies violations as a Class A misdemeanor, on par in Tennessee with simple drug possession and domestic assault.

In total, Tennessee hosts 651 Bitcoin ATMs, with a majority of them clustered around Nashville, the state’s most populous city and capital, according to Coin ATM Radar. The locations range from gas stations and smoke shops to liquor stores.

According to FBI numbers released this month, Americans aged over 60 lost $257 million to scams involving Bitcoin ATMs last year, a 58% increase year-over-year. Citizens under 30, for comparison, lost $6.6 million to that type of scam in 2025.

In March, Indiana became the first U.S. state to impose a sweeping ban on Bitcoin ATMs, per WLFI. The publication cited one law enforcement official who said, “The number of reports has doubled each year for the last four years.”

Amid an uptick in scams, several states have passed legislation imposing transaction limits and mandating refunds for victims. In Minnesota, lawmakers are weighing legislation that would follow Tennessee’s lead and ban Bitcoin ATMs across the state.