Tennessee Lawmakers Pass Crypto ATM Ban, Triggering Removals by July 1 – Bitcoin News

Key Takeaways:

• Governor Bill Lee signed HB 2505 on April 23, 2026, making Tennessee the 2nd state to ban crypto ATMs.
• The FBI linked approximately $142 million in losses from Tennessee crypto scams in 2025, driving bipartisan support.
• All virtual currency kiosks in Tennessee must be removed or shut down before the July 1, 2026, effective date.

House Passes 94-0 Crypto ATM Ban, Forcing Retailers to Remove Machines by July 1

House Bill 2505, sponsored by House Speaker Cameron Sexton (R-Crossville) and Rep. Jay Reedy (R-Erin), passed both chambers without a single dissenting vote. The House approved the measure 94-0 on March 16, 2026. The Senate matched that count the same day, 32-0.

The law takes effect July 1, 2026, and applies to all virtual currency kiosks operating in Tennessee, including machines already installed.

Under the new law, a virtual currency kiosk is defined as any electronic terminal that enables the exchange of virtual currency for money, bank credit, or other virtual currency. That includes machines connected to external exchanges as well as those holding digital assets directly.

Operating, installing, or allowing a kiosk on controlled property becomes a Class A misdemeanor once the law is enforced. Owners, operators, and property managers all fall within its reach. The bill provides no exceptions for existing machines or licensed financial institutions.

Lawmakers pointed to fraud as the primary reason for the ban. The FBI’s 2025 Internet Crime Report identified approximately $142 million in reported cryptocurrency scam losses in Tennessee alone. Kiosks have reportedly been a preferred tool for scammers because the transfers are fast, difficult to trace, and nearly impossible to reverse.

“Virtual currency kiosks have become a gateway for scammers to exploit Tennesseans, especially our seniors, with little hope of recovering their money once it’s gone,” Sexton remarked.

Reedy echoed that concern. “ Crypto ATMs are very often used in scams, especially ones that target seniors in our state. These ATMs allow fast, hard-to-trace transfers of money,” he said.

The Tennessee Sheriffs’ Association and AARP were among the consumer advocates who pushed for action, with pressure building after crypto ATM fraud increased starting in 2023. Earlier versions of the legislation considered transaction limits and stricter regulations. Lawmakers chose a full ban instead.

According to coinatmradar.com, 20 active crypto ATMs currently serve the Murfreesboro area, with an additional machine in nearby McMinnville. The kiosks are embedded in everyday retail locations, including convenience stores, tobacco and vape shops, and neighborhood liquor stores.

Every one of those locations faces a hard deadline. Under HB 2505, operators and property managers must decommission or remove all kiosks by July 1, 2026. No grace period is written into the law. Legitimate users who relied on in-person crypto transactions will need to shift to online exchanges or wallets.

Indiana moved first on a statewide ban. Tennessee is now second. Other states watching fraud data closely may follow. The law is enrolled as Public Chapter 766 and was transmitted to the governor on April 13, 2026, before being signed ten days later. Enforcement begins in just over two months.