Tennessee Bans Crypto ATMs Statewide, Becoming Second U.S. State to Impose Full Prohibition

Gate News message, April 25 — Tennessee has become the second U.S. state to outright ban cryptocurrency ATMs, making it a misdemeanor to operate or host the machines anywhere in the state. Gov. Bill Lee signed House Bill 2505 into law on April 13 after it passed both chambers unanimously. The law will take effect July 1 and prohibits the installation or operation of “virtual currency kiosks,” commonly known as bitcoin ATMs, which are typically found in gas stations, convenience stores, and shopping malls. Violations carry a Class A misdemeanor charge, resulting in penalties of up to one year in prison and a $2,500 fine. The law applies to both crypto ATM operators and businesses that allow them on their property.

Tennessee follows Indiana, which became the first state to enact a full statewide ban last month. According to an AARP report, thirty states have introduced bills related to crypto kiosks in 2026 alone, with a total of 20 states having passed laws as of now. Among those, many have added provisions requiring crypto kiosk operators to hold a state license, set daily transaction limits, and in some cases offer refunds to scam victims.

Crypto kiosks have been exploited for years by international scammers to facilitate billions of dollars in fraud. A common scheme involves scammers posing as police or government officials, directing victims to withdraw cash, convert it into cryptocurrency, and send it via a kiosk. Cryptocurrency kiosks were tied to nearly $390 million in reported losses in 2025 alone, according to FBI data, with older Americans accounting for a disproportionate share of victims.