The state of Tennessee has become the second state in the United States to impose a complete ban on crypto ATMs. The law, signed by Governor Bill Lee on April 13 and unanimously accepted by both chambers, will go into effect as of July 1. The law completely prohibits the installation and operation of cryptocurrency vending machines, which are especially common in gas stations and shopping malls.
Scope of the ban and penalties
The new regulation covers not only companies and individuals operating ATMs, but also businesses that allow the machines to be kept on their premises. Breaking this ban carries severe penalties. Under the law, installing or operating a crypto ATM will officially be considered a first-degree misdemeanor (Class A misdemeanor). Individuals or businesses who commit this crime face up to one year in prison and a $2,500 fine.
Tennessee is the second state to take this drastic step in the field of cryptocurrency. Last month, Indiana passed a similar law, completely banning crypto ATMs across the state.
Four Republicans supported this bill in the Tennessee State Assembly. According to official records, the law was officially codified last week and its entry into force date was clarified.
The outlook for crypto ATMs in the US
Cryptocurrency ATMs are digital kiosks that allow users to buy and sell cryptocurrencies for cash and transfer them to their wallets. Although they offer essentially legal technology, in recent years many states have begun cracking down on the use of these machines for fraudulent purposes.
According to a report by AARP, thirty different states in the US have introduced bills related to crypto kiosks this year. By 2026, legal regulations on this issue will be implemented in a total of 20 states. In some states, additional requirements have begun to be required from those operating these machines, such as obtaining a state license, daily transaction limits and the obligation to refund money to fraud victims.
Fraud risk and grievances
While crypto kiosks are not directly illegal, they are frequently used by international fraud networks around the world, especially in the United States. In one common scam scenario, criminals pose as government officials, tell victims they owe a fake debt or will be arrested, and ask them to send crypto from an ATM.
According to FBI data, approximately $390 million in losses were reported in fraud cases through crypto ATMs alone in 2025. A significant portion of these losses were made up of elderly Americans.
The increase in similar incidents is among the main reasons for the rapid spread of legal regulations regarding crypto ATMs. Government sources state that stricter measures have been taken at the state level to prevent misuse of these machines.
On the other hand, many states are also working on different measures to protect users. Licensing regulations, transaction limits and the obligation to refund suspicious transfers stand out among these measures.
This decision taken by Tennessee is interpreted as an important turning point for the future of crypto ATMs in the country. According to experts, it is thought that similar bans may come to the fore in other states.
