North America’s largest Bitcoin ATM operator shuts down network, files for bankruptcy

“The company has continued to strengthen its protocols and procedures to combat fraud and protect the customers who use its BTMs, including enhanced identity verification, customer fraud warnings, and its more recent adoption of lower transaction limits for its customers,” CEO Alex Holmes said in the statement announcing bankruptcy.

“Nevertheless, the regulatory environment for BTM operators has shifted significantly: States have imposed increasingly stringent compliance obligations, including new transaction limits, and in some jurisdictions, outright restrictions or bans on BTM operations; and operators have faced increasing litigation and regulatory enforcement. These developments have materially affected Bitcoin Depot’s business and financial position.”

The regulations were intended to prevent scams and other illegal transactions using cryptocurrency. An investigator with the Outagamie County Sheriff’s Office said more money was being stolen by cryptocurrency scams than bank robberies -- amounting to $43 million a year in Wisconsin, $4.8 billion in the U.S., and $158 billion in illicit digital assets globally.

Consumer First Alert’s Tammy Elliott reported in February that Outagamie County saw a 90% drop in cryptocurrency crimes after warning signs were required at cryptocurrency ATMs. Wisconsin passed a law setting a $2,000 daily transaction limit and mandating kiosk operators register with the state.

Indiana approved banning crypto kiosks in March. Bitcoin Depot’s home state of Georgia made tougher regulations the law last week, including daily transaction limits and mandatory warnings before accepting deposits.