On April 23, 2026, Tennessee Governor Bill Lee signed House Bill 2505 into law, making Tennessee the second U.S. state to enact a complete ban on cryptocurrency automated teller machines (ATMs), following Indiana. The law takes effect July 1, 2026, requiring all virtual currency kiosks currently operating in the state to be removed or shut down, with no grace period for existing installations.
Unanimous Bipartisan Support Fueled by Fraud Data
The legislation, sponsored by House Speaker Cameron Sexton (R-Crossville) and Rep. Jay Reedy (R-Erin), passed both chambers without a single dissenting vote — 94-0 in the House and 32-0 in the Senate. Lawmakers cited the FBI’s 2025 Internet Crime Report, which identified approximately $142 million in reported cryptocurrency scam losses in Tennessee alone. Crypto ATMs have become a preferred vector for scammers due to their fast, hard-to-trace transactions that are nearly impossible to reverse.
“Virtual currency kiosks have become a gateway for scammers to exploit Tennesseans, especially our seniors, with little hope of recovering their money once it’s gone,” Sexton said during the signing. Reedy echoed: “Crypto ATMs are very often used in scams, especially ones that target seniors. These ATMs allow fast, hard-to-trace transfers of money.” Consumer advocacy groups including the Tennessee Sheriffs’ Association and AARP pushed for the ban, as crypto ATM fraud had surged since 2023.
No Exceptions, Hard Deadline for Retailers
Under HB 2505, a “virtual currency kiosk” is defined as any electronic terminal that enables the exchange of virtual currency for money, bank credit, or other virtual currency — including machines connected to external exchanges or holding digital assets directly. Operating, installing, or allowing such a kiosk on controlled property becomes a Class A misdemeanor. The bill provides no exceptions for existing machines or licensed financial institutions.
According to coinatmradar.com, the Murfreesboro area alone hosts 20 active crypto ATMs, with an additional machine in nearby McMinnville. These kiosks are embedded in everyday retail locations — convenience stores, tobacco and vape shops, neighborhood liquor stores. Every operator and property manager must decommission or remove all kiosks by July 1, 2026; no grace period is written into the law. Legitimate users who relied on in-person crypto transactions will need to shift to online exchanges or wallets.
Industry Impact and Broader Trends
Tennessee’s move follows Indiana’s earlier statewide ban, and other states are likely to follow. Lawmakers across the U.S. are watching fraud data closely. Some industry observers argue that transaction limits or enhanced KYC (Know Your Customer) protocols could address fraud without a total ban, but Tennessee chose the most stringent option.
The crypto ATM industry faces additional headwinds: Bitcoin Depot, one of the largest operators, recently disclosed losing just over 50 bitcoins (worth approximately $3.7 million) in a cyberattack. The incident underscores security vulnerabilities in the sector. With Tennessee’s deadline less than three months away, operators must quickly decide whether to relocate machines to states with friendlier regulations or exit the business entirely. The law is enrolled as Public Chapter 766 and was transmitted to the governor on April 13, 2026, before being signed ten days later. Enforcement begins in just over two months.