Tennessee has become the second U.S. state to impose a complete ban on cryptocurrency ATMs, following Indiana. Governor Bill Lee signed House Bill 2505 into law on April 23, 2026, after it passed both chambers without a single dissenting vote — the House voted 94-0 and the Senate 32-0. The law takes effect on July 1, 2026, requiring all virtual currency kiosks operating in the state to be decommissioned or removed by that date.
Scope of the Ban and Penalties
The bill defines a “virtual currency kiosk” as any electronic terminal that facilitates the exchange of virtual currency for money, bank credit, or other virtual currency. This includes machines connected to external exchanges and those holding digital assets independently. After July 1, operating, installing, or allowing such a kiosk on controlled property will constitute a Class A misdemeanor. The law provides no exceptions for existing machines or licensed financial institutions; there is also no grace period. Owners, operators, and property managers all face legal exposure.
Fraud Concerns Drive Unanimous Action
The primary motivation behind the ban is the surge in cryptocurrency-related fraud. According to the FBI’s 2025 Internet Crime Report, Tennessee residents reported losses of approximately $142 million from crypto scams last year. Lawmakers highlighted that crypto ATMs are a preferred tool for scammers due to their speed, difficulty to trace, and irreversibility. House Speaker Cameron Sexton stated: “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.” Co-sponsor Rep. Jay Reedy added: “Crypto ATMs are very often used in scams, especially ones that target seniors. These ATMs allow fast, hard-to-trace transfers of money.”
Industry and Consumer Groups Support the Move
The Tennessee Sheriffs’ Association and AARP were among the consumer advocacy groups that pushed for action, as crypto ATM fraud has escalated since 2023. Early legislative proposals considered transaction caps or stricter regulations, but lawmakers opted for a full ban. According to CoinATMRadar.com, 20 active crypto ATMs currently serve the Murfreesboro area, with an additional machine in McMinnville. These machines are embedded in everyday retail locations such as convenience stores, tobacco and vape shops, and neighborhood liquor stores. Every one of these locations must now remove or decommission their kiosks before the July 1 deadline.
Broader Implications and National Trend
Indiana enacted the first statewide crypto ATM ban in 2025. Tennessee’s move may encourage other states grappling with rising scam losses to follow suit. Legitimate users who relied on in-person crypto transactions will need to pivot to online exchanges or self-custody wallets. The law, now enrolled as Public Chapter 766, leaves operators and property managers with just over two months to comply. Enforcement begins immediately after the effective date, with no transition period.