Payments

Crypto kiosk chaos: Can the bitcoin ATM industry survive?

Crypto kiosks face mounting state bans amid rising fraud, with $333 million in reported losses in 2025. While regulation is expected to shrink the market short term, industry leaders argue stronger compliance, fraud controls and targeted rules will reshape, not eliminate, the sector.

Photo: Adobe Stock

April 28, 2026 by Richard Slawsky — Editor, Connect Media

Summarize withChatGPTGrokPerplexityClaude

Nearly every day brings a report of some locality planning to ban cryptocurrency kiosks, or so-called "bitcoin ATMs." The devices, politicians claim, are helping foster fraud and fleece senior citizens out of their life savings and need to be done away with to protect the public.

The concerns aren't unfounded. The FBI reported $333 million in losses from crypto ATM scams in 2025, with more than 12,000 complaints about fraudulent activity. Those losses were 57% higher than the $247 million reported in 2024, and that trend only appears to be continuing.

There are currently more than 30,000 crypto kiosks operating in the U.S. One estimate pegs the size of the market in 2025 at $267 million and predicts it will top $7.7 billion by 2034, implying a 45.2% compound annual growth rate.

But with the pace of ban proposals only accelerating, are those estimates realistic? Instead, the better question might be, "Can the crypto kiosk industry survive the turmoil?"

Regulator response to increase fraud

Certainly, companies that operate fleets of crypto kiosks aren't oblivious to proposals that would essentially shut down their industry. Outright bans have already been enacted in Indiana and Tennessee, with several cities instituting local bans.

Bitcoin Depot, for example, while not directly addressing proposed bans, attributed recent revenue declines to the changing regulatory landscape in its 4Q2025 earnings call held March 16. The company is the largest crypto kiosk operator in North America, with a footprint of roughly 9,700 machines.

Q4 revenue was $116 million, down 15% from the previous year's fourth quarter, mainly due to the impact of new state regulations and enhanced compliance standards, officials said on the call. Additionally, the company estimates its crypto kiosk business will decline 30%-40% in 2026 due to regulatory headwinds.

Still, officials tried to put a positive spin on the developments.

"On the regulatory front, we expect continued activity at the state level in 2026," said then-CEO Scott Buchanan during the call. "While jurisdictions may introduce additional transaction limits or enhanced consumer protection requirements, we believe these measures ultimately raise industry standards and reinforce the advantages of scale, compliance infrastructure, and regulatory engagement, areas where Bitcoin Depot Inc. has led for years."

Buchanan, who was appointed CEO in November 2025, stepped down in March "to pursue a new opportunity outside of the company," according to a press release. He had been with Bitcoin Depot in various roles since 2019. Alex Holmes, former CEO of MoneyGram International, was appointed to replace him.

The wave of state-level bans did not come out of nowhere, said digital marketing specialist and industry observer Areh Caleb.

"Bitcoin ATMs have been disproportionately exploited in scams targeting elderly and financially vulnerable people," Caleb said in an email interview. "Regulators watched the numbers climb, heard from constituents who lost their savings and responded."

A battle for public opinion

The crypto kiosk industry is likely to face significant pressure in 2026, particularly for operators that fail to adapt.

Still, industry observers aren't predicting the death of crypto kiosks. Instead, they see operators increasing their focus on fraud prevention and adherence to regulatory standards

"The machines themselves are not inherently fraudulent. They are simply an access channel," Ravishankar Chamarajnagar, an industry insider, leader and founder of the crypto compliance product Brackt Inc., said in an email interview. "The real issue is that scammers exploit weak controls and target elderly or less sophisticated users through impersonation scams, fake tech support, romance scams and urgent payment demands."

The industry's biggest risk is not regulation, it is losing public trust, he said. Others echoed that sentiment.

"I completely understand the frustration driving these laws — scammers have exploited these machines to steal hundreds of millions from ordinary people, especially through tech support and investment frauds," Chicago attorney George Dowd said in an email interview. Dowd has been involved in the cryptocurrency space for years, served on the Board of the Global Digital Asset & Cryptocurrency Association and has authored a number of handbooks on digital assets, cryptocurrencies and blockchain.

"I think blanket bans are an overreaction that hurt legitimate users who rely on kiosks for access, particularly the unbanked and privacy-conscious folks," he said. "The better approach is smart, targeted regulation. We should require proper licensing under money transmitter rules, set some reasonable daily limit per user and use blockchain analytics to flag known bad addresses. Perhaps most important would be adding clear on-screen fraud warnings prior to transaction initiation."

Increased emphasis on compliance and fraud prevention

The state-level crackdowns on crypto kiosks look threatening on the surface, but they are more likely to consolidate the industry than kill it, according to Aigars Pilmanis, founder of VolRadar, a financial analytics tool for options traders. Operators that build real-time fraud interruption into the product — capping first-time transaction amounts, confirming beneficiary identity before releasing funds, adding delays for new users — can credibly differentiate from the operators driving the headline numbers, he said in an email interview.

"The operators who treat compliance as a product feature rather than a cost center will outlast this cycle," Pilmanis said. "The ones who treat it as friction won't."

Some of the industry's biggest players agree. Crypto kiosk operator CoinFlip, which operates more than 5,500 crypto kiosks around the world, stressed its focus on compliance in a statement the company provided to KioskMarketplace.

"CoinFlip operates in 48 states and holds more than 40 state-granted money transmitter or equivalent licenses, reflecting a broad national consensus among regulators on how cryptocurrency kiosks can operate safely and compliantly," the company said in the statement. "We can't speak for the entire industry, but CoinFlip holds itself to the highest standards of compliance, consumer protection and transparency. We have been a registered Money Services Business since 2015, support commonsense legislation and believe all operators should meet consistent, clearly defined regulatory standards."

Crypto kiosk deployers need to begin working early with legislators to share data and push for targeted rules rather than blanket bans, said Andrew Barnard, CEO of crypto kiosk deployer Bitstop, in an email interview. Bitstop operates about 2,700 crypto kiosks across the U.S. and Puerto Rico.

"The operators standing in five years will be the ones who invested in compliance while others cut corners," Barnard said. "These kiosks serve customers in ways traditional finance doesn't — cash-preferring users, the unbanked, people who want to self-custody without linking a bank account to an exchange. That demand isn't going away."

"Prohibition doesn't stop fraud, it just drives consumers to alternatives, such as peer-to-peer marketplaces with less oversight than ours," he said.

One potential bright spot is that 2026 may mark the peak of regulatory activity.

"I think in 2026, we will have seen 80% to 90% of the states decide where their stance is on this from a regulatory standpoint, at least initially," Buchanan said on the Bitcoin Depot earnings call in response to a reporter's question. "There could be some revisions to existing states with bills in 2027 as they kind of learn more and see what the impact is of what they passed initially. But, generally, I would say by the end of 2026, we will have clarity on which states are going to regulate them now."

To see where bitcoin ATMs have been banned, check out this article on ATM Marketplace.

About Richard Slawsky

---