Cryptocurrency ATMs are rapidly disappearing from the American landscape as kiosk operators in two US states face bans and restrictions as new laws come into effect.
Crypto ATM laws passed by Tennessee and Georgia went into effect on Wednesday, imposing a complete ban on the former and requiring transaction and reporting limits on the latter. The two states’ measures followed bans in Indiana, which went into effect in March, and Minnesota, which will implement an ATM ban on August 1.
The Tennessee law, signed by Governor Bill Lee in April, prohibits the use and installation of ATMs and cryptocurrency kiosks, while the Georgia law requires ATM operators to limit money sent to new and existing users, issue warnings to customers and, in some cases, refund those who may have been victims of fraud.
There were 185 ATMs and crypto kiosks operating in Tennessee before the state ban went into effect on July 1. Fountain: CurrencyATMRadar
Many US state governments and municipalities have individually begun cracking down on crypto ATM operators in response to incidents in which residents, particularly seniors, were connected to send funds to scammers. Lawmakers in Delaware and New Jersey have proposed similar measures banning the machines entirely.
Related: Massachusetts City to Weigh Ban on Crypto ATMs, Citing Financial Risks
The restrictions may have already contributed to the bankruptcy of at least one ATM operator. In May, Bitcoin Depot filed for Chapter 11 bankruptcy. The company had revealed just days earlier that it had “substantial doubts” about its future amid a challenging regulatory environment and lawsuits.
“Bitcoin Depot’s bankruptcy is likely a preview of what the broader crypto ATM industry in the US will face in the coming years,” Roshan Dharia, Echo Base CEO and restructuring advisor, told Cointelegraph following the Chapter 11 filing. “The traditional model relied on high transaction spreads and limited regulatory scrutiny to offset the unusually high costs of compliance, cash logistics, fraud remediation, and retail revenue sharing. “Equation is breaking down as states increasingly impose consumer protection standards that compress fees, expand operators’ liability for scam-related activities, and raise expectations around transaction monitoring and refunds.”
Canada mulls nationwide ATM ban
Although not yet in effect, federal policymakers in Canada have proposed a complete ban on crypto ATMs across the country. The proposed policy, which would still allow Canadians to purchase digital assets from brick-and-mortar money services businesses, was in response to what officials called ATMs being the “primary method for fraudsters to defraud victims and for criminals to place the cash proceeds of crime.”
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