Bitcoin Depot, once the largest network of crypto ATMs in North America, is shutting down after mounting legal pressure, fraud concerns, and a wave of state-level crackdowns on Bitcoin teller machines. The company announced Monday that it has filed for Chapter 11 bankruptcy and is winding down operations, marking a major setback for a business that had expanded to 9,276 kiosks across the United States, Canada, and Australia. The kiosks, which allowed customers to convert cash into Bitcoin, have already been taken offline, and Bitcoin Depot said it plans to sell its assets through a court-supervised process.
CEO Alex Holmes said the current regulatory climate had made the company’s business model unsustainable. In the company’s statement, Holmes pointed to stricter compliance requirements, lower transaction limits, restrictions in some jurisdictions, and outright bans in others as major obstacles for crypto ATM operators. The filing comes as Bitcoin Depot faces lawsuits from the attorneys general in Massachusetts and Iowa over allegations that it enabled crypto scams.
Massachusetts Attorney General Andrea Campbell said in a February press release that the company used misleading sales tactics, overcharged customers, and knowingly facilitated scams that cost Massachusetts consumers more than $10 million. The lawsuit alleges that Bitcoin Depot was aware of high scam activity on its machines and removed safeguards, including customer screening questions for large transactions. It also claims that when scam victims contacted the company after depositing cash into fraudsters’ accounts, they were often told there was nothing Bitcoin Depot could do.
The broader crypto ATM sector has come under increasing scrutiny as fraud complaints have surged. FBI data cited in the report showed 13,460 complaints involving crypto ATMs and kiosks last year, with losses totaling $389 million. Regulators in several states have already acted against the machines. Indiana, Minnesota, and Tennessee have imposed statewide bans, while dozens of other states have adopted laws to regulate their use.
Bitcoin Depot said it had attempted to respond to fraud risks by strengthening its procedures, including enhanced identity verification, fraud warnings for customers, and lower transaction limits. Still, the company’s financial performance appears to have deteriorated sharply. CoinDesk reported that Bitcoin Depot’s preliminary first-quarter earnings showed revenue falling 49% from the same period a year earlier.
The shutdown underscores the growing pressure on crypto kiosk operators as lawmakers and regulators move to curb scam-related losses. Bitcoin Depot, once a dominant name in the sector, is now moving through bankruptcy as legal, regulatory, and financial challenges converge.
