Cryptocurrency ATMs are rapidly disappearing from the American landscape as kiosk operators in two US states face bans and restrictions as new laws take effect.
Cryptocurrency laws passed by Tennessee and Georgia took effect Wednesday, imposing a total ban in the former and requiring transaction limits and reporting in the latter. The measures taken by the two states follow bans in Indiana, which took effect in March, and Minnesota, which was set to impose an ATM ban on August 1.
The Tennessee law, signed by Governor Bill Lee in April, prohibits the use and installation ATMs and cryptocurrency kiosks, while Georgia law requires ATM operators to cap money sent to new and existing users, issue warnings to customers, and in some cases reimburse those who may have been victims of fraud.
There were 185 crypto ATMs and kiosks operating in Tennessee before the statewide ban took effect on July 1. Source : CoinATMRadar
Many U.S. state governments and municipalities have individually started to crack down on crypto ATM operators in response to incidents of residents, particularly elderly people, being tricked into sending funds to fraudsters. Lawmakers from Delaware and New Jersey similar measures proposed ban the machines completely.
Related: Massachusetts Town to Consider Banning Crypto ATMs, Citing Financial Risks
The restrictions may have already contributed to the bankruptcy of at least one ATM operator. In May, Bitcoin Depot filed for Chapter 11 bankruptcy. The company had disclosed a few days before that it had “substantial doubts” about its future in a difficult regulatory environment and legal challenges.
“Bitcoin Depot’s bankruptcy is likely a preview of what the broader crypto ATM industry will face in the United States over the next several years,” Roshan Dharia, Echo Base CEO and restructuring advisor, told Cointelegraph after the Chapter 11 filing. “The traditional model relied on high transaction spreads and limited regulatory oversight to offset unusually high costs of compliance, cash logistics, fraud prevention and sales revenue sharing “This equation is collapsing as states increasingly impose consumer protection standards that compress fees, expand operator liability for scam-related activities, and increase expectations for transaction monitoring and reimbursement.”
Canada Considers Banning ATMs Nationwide
Although not yet in effect, Canada’s federal decision-makers proposed a total ban on crypto ATMs across the country. The proposed policy, which would still allow Canadians to purchase digital assets from physical money services businesses, was in response to what officials called ATMs “the primary method used by scammers to defraud their victims and by criminals to place the proceeds of their crime.”
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