Bitcoin ATM Operator Files for Bankruptcy as Florida Tightens Rules to Curb Fraud
The crypto-kiosk industry took two heavy blows at once this week: Florida moved to clamp down on Bitcoin ATMs with new consumer-protection rules, while Bitcoin Depot, the largest operator of such machines in North America, filed for Chapter 11 bankruptcy.
Recently, Florida lawmakers passed legislation aimed at reducing fraudulent activities linked to cryptocurrency kiosks. The law is scheduled to take effect in January and will cap deposits at $2,000 per day for new users, while allowing higher limits of up to $10,000 per day for existing customers. Lawmakers say the goal is to slow the rapid movement of cash in fraudulent schemes. WFLAWFLA
The legislation follows months of reporting by WFLA’s Shannon Behnken documenting how scammers exploit the machines—often placed inside gas stations and other retail spots—to target elderly and vulnerable victims. Authorities say these scams are difficult to combat because the machines allow money to be transferred quickly and anonymously, and once funds are sent, recovery is nearly impossible. WFLA
One victim, Beth Gibson, said she lost $6,000 to a scheme that began with a caller posing as law enforcement, falsely claiming she would be arrested for missing jury duty. The caller then offered a supposed way out: pay “bail” through a Bitcoin ATM, with the promise the money would later be refunded once the matter was resolved. “It felt like a nightmare… I was so scared,” Gibson said. WFLAWFLA
State Representative Michael Owen, who co-sponsored the bill with Senator Darryl Rouson, described the legislation as a crackdown on fraud rather than an attempt to harm legitimate businesses. He stressed, “The legislation is not intended to shut down legitimate businesses,” and added, “but if a business model is largely built around fraudulent activity… then so be it.” Owen also highlighted the seriousness of the issue, pointing out cases where victims reportedly lost up to $240,000 within just a few days. WFLAWFLA
Against that backdrop, Bitcoin Depot, the largest Bitcoin ATM operator in North America, has filed for Chapter 11 bankruptcy protection and says it plans to wind down its network of more than 9,000 machines. The company’s CEO cited increasing regulation and some outright bans on the machines as part of the pressure facing the industry. WFLAWFLA
The collapse reflects a broader regulatory squeeze. CEO Alex Holmes attributed the failure to a regulatory environment that has turned hostile toward Bitcoin ATM operators, with states imposing transaction caps, tighter compliance rules, and in some cases outright bans. Bitcoin Depot’s revenue fell $80.7 million, a 49.2% year-over-year decline, in the first quarter of 2026 after transaction volumes shrank under regulatory pressure and tightened compliance checks. So far, Indiana, Minnesota and Tennessee have banned crypto ATMs, while Connecticut suspended Bitcoin Depot’s business license. BeInCryptoSouth Florida Reporter
The fraud problem driving these crackdowns is substantial. The FBI logged 13,460 crypto-kiosk fraud complaints in 2025, with reported losses of $389 million—a 58% jump from the prior year. BeInCrypto
Source: WFLA / Better Call Behnken — https://www.wfla.com/8-on-your-side/better-call-behnken/bitcoin-atm-operator-files-for-bankruptcy-as-florida-tightens-rules-to-avoid-fraud/