Bitcoin ATM company Bitcoin Depot filed for Chapter 11 protection in the Southern District of Texas on May 18, winding down its operations and selling assets, and announced that its network of kiosks, which numbered more than 9,000 locations worldwide as of August 2025, would go offline on the same day.
According to a May 12 SEC disclosure, first-quarter sales were down 49.2% year over year, gross profit was down 85.5%, and management expressed “significant doubts” about the company’s ability to continue as a going concern. Net loss for the quarter was $9.5 million, compared with net income of $12.2 million for the year-ago period.
Bitcoin Depot has tied this deterioration to state and local regulations, lower transaction limits, increased background verification requirements, lawsuits, and more than $20 million in unpaid legal judgments.
This accounting treatment turned bankruptcy into a regulated business and explains how compliance requirements dismantled its economics.
| metric | Q1 2025 | Q1 2026 | change |
|---|---|---|---|
| revenue | — | — | -49.2% compared to previous year |
| gross profit | — | — | -85.5% compared to previous year |
| Net income or loss | $12.2 million profit | $9.5 million loss | swing to loss |
| Occurrence of legal judgment | — | Over $20 million | balance sheet pressure |
What the machine should do
Bitcoin ATMs allow users to exchange cash for cryptocurrency without linking a bank account, making Bitcoin accessible to customers who prefer cash, those who can’t afford a bank account, or anyone who wants direct access without connecting to an exchange.
There have been structural problems with this model from the beginning, as FinCEN has set kiosk fees at 7% to 20%, far higher than fees for centralized exchanges.
While this pricing may sustain emergency or one-time cash conversions, building a mass adoption argument based on a 20% fee will always be a bust. Machines served as expensive introductory ramps, and the economics of low cost and repeated use were always out of reach for consumers.
FTC data showed The total amount of Bitcoin ATM fraud reported is $65 million in the first half of 2024, with a median reported loss of $10,000. FBI data for 2025 shows 13,460 complaints related to cryptocurrency kiosks were recorded, with total reported losses of $389 million, an increase of 58%.
Approximately $257.5 million of this amount was accounted for by adults over 60, and the concentration of victims among the elderly has given regulatory pushback a political durability that standard anti-money laundering enforcement rarely achieves.
Indiana has enacted a statewide ban on virtual currency kiosks, Tennessee has made establishing or operating such kiosks a Class A misdemeanor, and Minnesota has approved a ban that will go into effect in 2026.
The Bitcoin Depot bankruptcy directly connects these two threads. That’s because tightened KYC controls reduced transaction throughput, lower fraud alerts and limits reduced revenue per machine, and legal costs compounded the $20 million in outstanding legal judgments already on the books.
Compliance measures that made kiosks more secure have eroded the economic advantage that made high fees defensible.
According to Coin ATM Radar data compiled by Finbold, the number of Bitcoin ATMs worldwide will increase from 37,722 to 39,158 in 2025, an increase of approximately 4 machines per day.
The United States accounted for approximately 78% of the global installed base with 30,617 machines at the end of 2025, an increase of only 1.65% from 30,119 machines at the beginning of the year.
Australia added 601 units, an increase of 43%, Canada by 8.4% and Europe by 6.5%. The markets where kiosks are still expanding are those where regulators still treat kiosks primarily as tools for financial access.
Two cases of virtual currency ATMs
In a bullish case, buyers could acquire viable Bitcoin depot assets and selectively restart machines in states without outright bans, and the global number continues to grow.
Operators that absorb compliance costs operate machines that act as regulated cash exchange terminals with low throughput and narrow margins.
Although margins have been squeezed, the product remains as a narrow legal cash-to-crypto channel for users who cannot or will not use centralized exchanges.
Bitcoin Depot has said it intends to sell the assets as part of an orderly process, meaning the physical infrastructure could be transferred to a new owner and reopened.
In this scenario, kiosks resemble check-cashing stores, albeit with high fees, limited quantities, and narrow actual demand, and are only sustainable if operators accept thinner economics.
In the bear case, if Indiana, Tennessee, and Minnesota are leading edge rather than outliers, the U.S. installed base will shrink sharply.
Each ban removes some of the 30,617 machines, nearly four in five global kiosks. Bitcoin Depot’s approximately 9,000 locations will represent approximately 23% of the global total at the end of 2025. If these assets are not reactivated, the installed base will take a direct hit before further state action can compound losses.
Even if not prohibited, machines can be shut down without regulatory intervention if KYC requirements, transaction restrictions, refund obligations, and litigation risks make high-fee kiosk operations unprofitable.
| scenario | what happens to the machine | business model | Impact of introducing Bitcoin |
|---|---|---|---|
| Bull case: regulated cash niche | Assets are sold, selected machines are restarted in a permissive state, and global growth continues | Cash conversion terminal with low profit margin and emphasis on compliance | ATMs will survive as niche infrastructure |
| Bear case: US contraction | Bitcoin Depot assets remain offline and operators withdraw from high-risk markets as state bans expand | High pricing models violate KYC, restrictions, refunds and litigation | Bitcoin adoption moves further into exchanges, ETFs, wallets, and institutions |
Cash bridge with no path to scale up
Bitcoin adoption has gone far beyond kiosks, with Chainalysis estimating that Bitcoin-to-fiat flows to centralized exchanges will exceed $1.2 trillion between July 2024 and June 2025.
ETFs, mobile wallets, stablecoins, and institutional rails currently have room for adoption. Chainalies’ 2025 Adoption Index ranks India, the US, Pakistan, Vietnam, and Brazil as top markets leveraging exchange, mobile, and institutional rail.
Bitcoin ATMs provided a physical entry point for users who preferred cash, made Bitcoin visible in a retail environment, and operated at a time when cryptocurrencies still needed a real-world interface.
The distance between that fee and exchange-based alternatives has always been too far for mass adoption, and the use case that generated the most profitable trades resulted in $389 million in reported fraud losses in a single year.
Machines in a forgiving state are likely to remain compliant cash exchange terminals serving a narrow user base that still requires in-person cash access.
The rest leaves a clearer record of how the dream of a crypto ATM was an expensive gateway to making Bitcoin visible without making it cheap, reliable, and reproducible enough to serve as mass market infrastructure.
(Tag translation) Bitcoin
