Tennessee to Ban Cryptocurrency Kiosks Effective July 1

Tennessee Governor Bill Lee has signed House Bill 2505 into law, effectively banning the installation and operation of cryptocurrency kiosks and ATMs across the state. The law takes full effect on July 1, leaving operators a narrow window to remove machines or face legal penalties. The legislation reclassifies the operation of these machines as a Class A misdemeanor. This shift allows state authorities to pursue criminal charges against both the kiosk operators and the businesses hosting the machines, with penalties including fines of up to $2,500 and prison sentences of up to 11 months and 29 days. According to data from CoinATMRadar, there were over 570 crypto kiosks active in Tennessee as of Monday. Major operators such as CoinFlip and the Nasdaq-listed Bitcoin Depot are among those affected. Following the news, Bitcoin Depot shares saw a decline of approximately 6.9%. The ban is driven by a surge in financial scams targeting vulnerable populations, particularly seniors. The FBI reported that crypto and AI-related scams were among the most costly for Americans in 2025, with over 13,000 complaints specifically linked to crypto ATMs, resulting in losses exceeding $389 million. This move reflects a growing trend of state-level crackdowns on crypto kiosks in the U.S., with similar efforts appearing in Massachusetts and Minnesota. For the industry, this signals an increasing regulatory appetite to eliminate physical crypto entry points to mitigate fraud.