Tennessee will outlaw all 651 cryptocurrency ATMs in the state starting July 1, making it the second state to enact a full ban as authorities move to cut off a key vector for financial fraud against seniors.
"Crypto ATMs have given scammers a fast and easy way to target our citizens and scare them into draining their savings,” state Representative Jay Reedy, a co-sponsor of the bill, said in a March statement.
The new law, House Bill 2505, classifies violations as a Class A misdemeanor, with penalties of up to one year in prison and fines up to $2,500. The move follows a similar ban in Indiana last month and comes as FBI data shows Americans over 60 lost $257 million to crypto ATM scams in 2025, a 58% year-over-year increase.
The ban highlights a growing trend of state-level crackdowns on physical crypto infrastructure, creating a split between states opting for outright prohibition versus stricter regulation. For operators, the law eliminates a revenue stream and introduces direct legal risk for businesses hosting the kiosks, potentially pushing more crypto activity to online-only platforms.
The legislation, signed by Governor Bill Lee on April 13, holds both the operators of the machines and the businesses that host them liable. The state's 651 crypto kiosks, a majority of which are clustered around Nashville, are often found in gas stations, convenience stores, and liquor shops, according to data from Coin ATM Radar.
"These kiosks have become a gateway for scammers to exploit Tennesseans, especially our seniors," said co-sponsoring Representative Cameron Sexton, noting the difficulty victims face in recovering funds.
While Tennessee and Indiana have opted for full prohibitions, other states are pursuing a path of tighter control. According to an AARP report, 30 states have introduced legislation related to crypto kiosks this year. Many of these measures focus on imposing daily transaction limits, requiring operator licenses, and creating reimbursement mechanisms for scam victims. Minnesota lawmakers are reportedly considering a ban similar to Tennessee's.
The varied approaches underscore a broader regulatory debate on whether to manage risk through oversight or to eliminate the physical access points that enable cash-based crypto fraud schemes.
This article is for informational purposes only and does not constitute investment advice.
