Author: Ben Dooley

Translation: Deep Tide TechFlow

Deep Tide Overview: Crypto ATMs, which once flourished across convenience stores in the U.S., are collectively withdrawing under regulatory pressure. The world's largest crypto ATM operator, Bitcoin Depot, filed for bankruptcy protection on May 18, with approximately 9,700 machines taken offline. The direct cause is the intense rollout of transaction limits, license suspensions, and anti-fraud lawsuits by various states—FBI data shows that consumers lost $389 million through crypto ATMs in 2025. This report from ICIJ (International Consortium of Investigative Journalists) reviews the entire process of this publicly listed company's expansion to collapse.

Caption: On April 6, 2026, in a convenience store in Haverhill, Massachusetts, a police officer is disconnecting the power to a Bitcoin Depot ATM.

Image source: Jessica Rinaldi/The Boston Globe via Getty Images

Bitcoin Depot was once the world's largest cryptocurrency ATM operator and officially filed for bankruptcy protection on May 18. This company, long accused of facilitating fraud, dealt another blow to the industry.

CEO Alex Holmes stated on the company’s website that roughly 9,700 crypto ATMs will be taken offline, and operations will cease.

Holmes attributed the reasons to "increasingly stringent compliance requirements, including new transaction limits, and direct restrictions or bans on crypto ATMs in certain jurisdictions," which made the company’s business model unsustainable.

Over the past year, local and state governments across the U.S. have significantly tightened regulations on crypto ATMs. These machines function similarly to bank ATMs but are used to exchange cash for cryptocurrency. Due to concerns that these machines could become tools for scams, regulators have initiated investigations into operators.

FBI data reveals that in 2025, consumers suffered scam losses totaling $389 million through crypto ATMs. Scammers used these machines to rapidly transfer victims' funds overseas, evading the reach of U.S. law enforcement.

Under siege from multiple states within six months, quarterly revenue plummeted nearly 50%

As the largest crypto ATM operator, Bitcoin Depot became a target of regulation. How intense has the crackdown been over the past six months?

Connecticut revoked Bitcoin Depot's banking license due to alleged ineffective anti-money laundering controls; the Missouri Attorney General launched an investigation into the company and other crypto ATM businesses; Nevada and Maine reached enforcement settlements with the company, requiring fines and compliance with state regulations. The Massachusetts Attorney General outright sued Bitcoin Depot, accusing it of deriving most of its revenue from crypto scams. The Iowa Attorney General's office also filed a lawsuit.

The financial report reflects a startling figure. Bitcoin Depot's recent filings to the SEC show that quarterly revenue as of March fell nearly 50% year-on-year, primarily due to "state and municipal regulations prohibiting or restricting crypto ATMs, capping fees, and limiting transaction amounts," as well as the company’s own "stricter" compliance and anti-fraud measures, such as enhancing KYC (Know Your Customer) processes.

In February of this year, the company announced that all transactions would require customer identity verification, making it harder for scammers to exploit these machines, but simultaneously deterring many users.

Enmeshed in lawsuits, legal fees pile up

As revenue plummets, Bitcoin Depot also bears enormous legal costs. Bankruptcy filings reveal the company faces multiple lawsuits, all pointing to the same issue: failure to take sufficient measures to prevent fraudulent transactions through its machines. In addition, a ruling related to a business dispute with a Canadian subsidiary at the end of 2025 has burdened the company with nearly $19 million in damages.

Joint investigations by ICIJ and CNN in 2025 found that at least $1.5 million in fraudulent transactions were completed through hundreds of Bitcoin Depot machines installed in Circle K convenience stores. Bitcoin Depot paid Circle K millions of dollars in leasing fees while also taking a cut from each transaction.

The investigation revealed that Circle K management was aware of the issue but continued to work with Bitcoin Depot nonetheless.