Bitcoin Depot bankruptcy shuts about 9,700 ATMs

Bitcoin Depot, once North America’s largest Bitcoin ATM operator, filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas on May 18 and took roughly 9,700 machines offline. The petition placed the company’s Canadian entities under court supervision and directed other international operations to wind down under local law.

The company reported first-quarter 2026 revenue fell 49.2% year over year, a decline of $80.7 million. Gross profit decreased from $31.2 million to $4.5 million and net results swung from a $12.2 million profit in the prior-year period to a $9.5 million loss. CEO Alex Holmes described the company’s business model as “unsustainable.”

State laws and enforcement actions narrowed the company’s operating options. California’s Digital Financial Assets Law capped daily ATM transactions at $1,000, limited fees to the greater of $5 or 15% and required written disclosures; a court upheld the daily cap in 2024 and the fee and disclosure rules took effect in 2025. Indiana banned crypto kiosks in March 2026, where nearly 900 machines had been operating. Tennessee’s ban is set to begin July 1, 2026, and Minnesota approved a prohibition. The American Bankers Association counted 20 states with new laws restricting crypto ATM activity as of April.

Regulatory and legal pressure included multiple lawsuits and enforcement actions. Iowa’s attorney general sued Bitcoin Depot and another operator in February 2025, saying more than 98% of funds Iowans sent through Bitcoin Depot were tied to scam transactions. Massachusetts filed suit in February 2026, alleging over half of the company’s ATM revenue in the state was scam-related. Maine reached a $1.9 million settlement to reimburse residents who lost money at kiosks between 2022 and 2025. Connecticut temporarily suspended Bitcoin Depot’s money-transmission license in March 2026, citing overcharges and refund failures. By the Chapter 11 filing, the company had recorded more than $20 million in legal judgments during the fourth quarter of 2025, and an April cyberattack removed $3.7 million from its crypto wallets.

Fraud complaints to federal authorities increased in 2025. The FBI recorded 13,460 crypto kiosk fraud complaints that year with reported losses of $389 million, a 58% rise from 2024. Adults aged 60 and older accounted for roughly $257.5 million of those reported losses.

Bitcoin ATMs let users buy Bitcoin with cash by scanning a QR code and inserting bills; operators typically delivered Bitcoin to a user wallet within minutes. Operators charged fees often between 10% and 30% per transaction. Bitcoin transactions are irreversible, and phone-based social-engineering scams that guided victims through ATM transactions became a common pattern across several states.

At the same time, other retail channels expanded. Spot Bitcoin exchange-traded funds became available in brokerage accounts, onboarding at exchanges and apps simplified, and stablecoin rails provided additional on-ramps to digital assets.

Operators said compliance requirements raised costs. Mandatory ID checks, blockchain analytics, transaction holds, written warnings, refund processes, fee caps, daily limits, state licensing and litigation reserves increased operating overhead and reduced margins.

Bitcoin Depot’s Chapter 11 removes a major physical channel for retail buyers and leaves regulated infrastructure such as ETFs, licensed custodians, exchanges and payment apps as the primary retail access points.