Tennessee Becomes Second U.S. State to Ban Crypto ATMs Statewide, Effective July 1

Gate News message, April 25 — Tennessee has become the second U.S. state to ban crypto ATMs statewide after Gov. Bill Lee signed House Bill 2505 into law on April 13. The law, which passed both chambers unanimously, was officially codified on Thursday and will take effect July 1.

The legislation prohibits the installation or operation of “virtual currency kiosks,” commonly known as bitcoin ATMs, which are typically found in gas stations, convenience stores, and shopping malls. The ban applies to both crypto ATM operators and businesses that allow the machines on their property. Violations carry a Class A misdemeanor charge, resulting in penalties of up to one year in prison and a $2,500 fine.

Indiana became the first state to enact a full statewide ban last month. According to an AARP report, thirty states have introduced bills related to crypto kiosks this year alone, bringing the total number that have passed laws to 20 as of 2026. Many of these states have added provisions requiring operators to hold a state license, set daily transaction limits, and offer refunds to scam victims.

Crypto kiosks have been tied to nearly $390 million in reported losses in 2025, according to FBI data, with older Americans accounting for a disproportionate share of victims. Scammers commonly pose as police or government officials, directing victims to withdraw cash, convert it to crypto, and send it via a kiosk.