Tennessee Becomes Second U.S. State to Ban Crypto ATMs, Imposing Class A Misdemeanor Penalties

Gate News message, April 24 — Tennessee has become the second U.S. state to outright ban cryptocurrency ATMs after Gov. Bill Lee signed House Bill 2505 into law on April 13. The legislation, which passed both chambers unanimously, was officially codified on Thursday and will take effect July 1. Operating or hosting a crypto ATM anywhere in the state will be classified as a Class A misdemeanor, carrying penalties of up to one year in prison and a $2,500 fine. The ban applies to both crypto ATM operators and businesses that allow the machines on their property.

Tennessee follows Indiana, which 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, with 20 states having already passed laws as of 2026. Many states have implemented less restrictive measures, requiring crypto kiosk operators to hold state licenses, set daily transaction limits, and offer refunds to scam victims.

Crypto kiosks have become a tool for international scammers, who use them to facilitate fraud by directing victims to withdraw cash, convert it to cryptocurrency, and send it via the machines. Cryptocurrency kiosks were tied to nearly $390 million in reported losses in 2025 alone, according to FBI data, with older Americans accounting for a disproportionate share of victims.