Tennessee Enacts Full Ban on Crypto ATMs, Escalates Regulatory Crackdown on Fraud

Odaily Tennessee Governor Bill Lee has signed a bill banning the operation of cryptocurrency ATMs statewide, making Tennessee the second state after Indiana to implement a complete ban.

The bill (HB 2505) has taken effect and will be enforced starting July 1. Under the new law, installing or operating a "virtual currency self-service terminal" (i.e., a Bitcoin ATM) will be classified as a Class A misdemeanor, punishable by up to one year in jail and a fine of $2,500. Additionally, merchants allowing such devices on their premises will also face legal liability.

Currently, most U.S. states have strengthened oversight by establishing licensing systems and imposing transaction limits, but full bans remain rare. Data shows that since 2026, 30 states have introduced related legislation, with 20 states having passed laws, reflecting a sustained tightening of measures against crypto ATM fraud risks.