Bitcoin Depot (NASDAQ: BTM), the largest Bitcoin ATM operator in North America, filed for voluntary Chapter 11 bankruptcy protection on May 18, saying the US regulatory climate for crypto kiosks had turned hostile enough to make its business model unsustainable. The company said it has taken its entire kiosk network offline.
The Atlanta-based firm filed in the US Bankruptcy Court for the Southern District of Texas and said the process is meant to support an orderly wind-down of operations and a sale of assets. As of August 2025, Bitcoin Depot had operated more than 9,000 kiosk locations globally.
State restrictions and enforcement pressure hit crypto ATM operators
Chief executive Alex Holmes said the operating environment for Bitcoin ATM companies had changed sharply. States have imposed tighter compliance obligations and new transaction limits, while some jurisdictions have moved to restrict or ban BTM operations altogether. Operators are also facing more litigation and regulatory enforcement.
Holmes said those shifts had materially damaged Bitcoin Depot’s business and financial position. In his words, the company’s current model is unsustainable under those conditions.
Compliance upgrades failed to stop the decline
Months before the filing, Bitcoin Depot had already stepped up compliance measures. In February, it rolled out a real-time identity verification system across its network, requiring users to scan a government-issued ID and complete biometric confirmation before any kiosk transaction could be completed. The move came as crypto ATM operators were being pushed to align with global AML and KYC standards.
That effort did not reverse the company’s deterioration. Holmes said Bitcoin Depot had strengthened identity checks, added customer fraud warnings, and lowered transaction limits over time, but those steps could not offset the structural impact of state-level restrictions and growing legal exposure.
Canadian entities included as sector scrutiny intensifies
Bitcoin Depot’s Canadian entities are part of the US court-supervised process, with restructuring proceedings in Canada expected to begin later. Other non-US entities will wind down under applicable local law.
The filing stands out as one of the biggest setbacks yet for the crypto ATM sector during a period of sustained pressure. Chainalysis said in its 2025 Crypto Crime Report that more than $300 million in losses that year were linked to scams carried out through crypto kiosks, a figure that accelerated regulatory scrutiny and enforcement across multiple US states.
Bitcoin Depot had also disclosed in July 2025 that an external system breach in June 2024 exposed personal data tied to roughly 27,000 customers, including names, phone numbers, driver’s license numbers, and in some cases dates of birth and email addresses. A federal probe delayed public disclosure of the incident for more than a year.