In a move to combat fraud, Tennessee has become the second U.S. state to outlaw Bitcoin ATMs. The decision criminalizes owning or operating these machines, which have been flagged by federal authorities as a tool for defrauding the elderly. As per House Bill 2505, signed into law on April 13 by Governor Bill Lee, operators must cease their services by July 1. This bill was introduced earlier this year and co-sponsored by Republican state representatives Cameron Sexton and Jay Reedy.
Sexton highlighted in March that these kiosks have become a conduit for scams targeting Tennesseans, particularly seniors. He pointed out the difficulty victims face in retrieving funds once lost to fraudulent schemes. This warning came as local authorities reported a scam where $4 million was stolen from victims by international fraudsters impersonating law enforcement.
Reedy emphasized that Crypto ATMs have facilitated quick and easy exploitation of citizens. The two-page bill, introduced in February, categorizes violations as a Class A misdemeanor, comparable to simple drug possession or domestic assault in Tennessee.
Tennessee is home to 651 Bitcoin ATMs, predominantly located around Nashville, the state’s largest city and capital, according to Coin ATM Radar. These machines are found at various establishments including gas stations, smoke shops, and liquor stores.
Recent FBI data revealed that Americans over 60 lost $257 million to Bitcoin ATM scams last year, marking a 58% increase from the previous year. In contrast, those under 30 lost $6.6 million in similar scams in 2025.
Earlier in March, Indiana became the first state to implement a comprehensive ban on these ATMs. According to WLFI, law enforcement officials noted that reports of such fraud have doubled annually over the past four years.
As scam incidents rise, several states are enacting laws to limit transactions and provide refunds for victims. Minnesota is considering legislation similar to Tennessee’s, aiming to prohibit Bitcoin ATMs statewide.