Tennessee Governor Bill Lee signed legislation this week, banning all cryptocurrency automated teller machines (ATMs) in the state, making Tennessee the second in the U.S. to do so after Indiana.
House Bill 2505, sponsored by House Speaker Cameron Sexton (R-Crossville) and Rep. Jay Reedy (R-Erin), passed both chambers without a single dissenting vote. The House approved the measure 94-0 on March 16, 2026, and the Senate matched that count the same day, 32-0. The law takes effect July 1, 2026, and applies to all virtual currency kiosks operating in Tennessee, including machines already installed.
Fraud Data Drives Bipartisan Support
Lawmakers pointed to fraud as the primary reason for the ban. The FBI’s 2025 Internet Crime Report identified approximately $142 million in reported cryptocurrency scam losses in Tennessee alone. Kiosks have reportedly been a preferred tool for scammers because the transfers are fast, difficult to trace, and 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 remarked. Reedy echoed that concern, noting that crypto ATMs allow fast, hard-to-trace transfers often used in scams targeting seniors.
Scope and Enforcement
Under the new law, 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. Operating, installing, or allowing a kiosk on controlled property becomes a Class A misdemeanor once the law is enforced. Owners, operators, and property managers all fall within its reach. The bill provides no exceptions for existing machines or licensed financial institutions. According to coinatmradar.com, 20 active crypto ATMs currently serve the Murfreesboro area, with an additional machine in nearby McMinnville. Every one of those locations faces a hard deadline: operators and property managers 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.
Context and Potential National Impact
The Tennessee Sheriffs’ Association and AARP were among the consumer advocates who pushed for action, with pressure building after crypto ATM fraud increased starting in 2023. Earlier versions of the legislation considered transaction limits and stricter regulations; lawmakers chose a full ban instead. Indiana moved first on a statewide ban; Tennessee is now second. Other states watching fraud data closely may follow. 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.