Tennessee Becomes Second U.S. State to Ban Crypto ATMs; Violations Carry Class A Misdemeanor

Gate News message, April 26 — Tennessee has become the second U.S. state to outright ban crypto ATMs statewide, with Governor Bill Lee signing House Bill 2505 into law on April 13. The measure, which passed both chambers unanimously, officially takes effect on July 1.

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

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, with a total of 20 states having passed related laws as of 2026. Many of these laws include provisions requiring operators to hold state licenses, set daily transaction limits, and in some cases offer refunds to scam victims.

Crypto kiosks have been exploited to facilitate billions of dollars in fraud, with scammers often posing as police or government officials to direct victims to withdraw cash, convert it to cryptocurrency, and transfer it via kiosks. According to FBI data, cryptocurrency kiosks were tied to nearly $390 million in reported losses in 2025 alone, with older Americans accounting for a disproportionate share of victims.