Tennessee Attorney General Jonathan Skrmetti has confirmed that the ban on cryptocurrency ATMs will go into effect following a failed legal challenge. According to reports from AMBCrypto, this development came after a federal court sided with Tennessee against crypto ATM operators, including CoinFlip, who had attempted to block the ban. The General Assembly had previously recognized that these machines benefit fraudsters at the expense of everyday citizens, with the court acknowledging strong public interest in allowing the law to take effect while the case proceeds. For AG Skrmetti, cryptocurrency ATMs are 'tools for scammers' and 'benefit fraudsters' more than citizens, characterizing them as instruments that primarily harm consumers rather than serve legitimate purposes.
The crypto ATM crackdown has resulted in unprecedented uninstallation numbers across the United States. As reported by CoinATM Radar, over 10,000 specialized crypto kiosks were uninstalled in June 2026, marking a record level of removals. The U.S. accounted for 9,798 out of the 10,230 uninstalled crypto ATMs globally, highlighting the close correlation between the ongoing state crackdown and regulatory enforcement. Under Tennessee law, Public Chapter 766 classifies the operation of crypto kiosks or crypto ATMs knowingly as a Class A misdemeanor. The state moved to ban crypto ATMs in April after $4 million in scam losses, primarily targeting elderly populations, with the enforcement action following similar bans in Indiana and Minnesota.
Despite the ban's implementation, crypto ATM operators have mounted significant legal resistance. CoinFlip, one of the largest operators, moved to block the ban but was unsuccessful in its injunction motion, with the federal court denying the request. This legal setback represents a significant blow to the crypto ATM sector, which had been attempting to prevent the enforcement of Public Chapter 766. The court's decision to allow the ban to proceed while the case continues suggests that the regulatory framework will remain in place until legal challenges are resolved, potentially setting a precedent for other states considering similar measures.
Despite the ATM crackdown, the broader crypto adoption landscape shows resilience through alternative payment methods. As reported by AMBCrypto, crypto card volume increased 106% last year, rivaling P2P stablecoin payments and emerging as a safer alternative for crypto spending. Unlike purpose-built crypto ATMs, crypto cards issued by Mastercard, Visa, and other crypto-focused payment platforms allow users to spend digital assets via traditional ATM networks, potentially mitigating the impact of the ATM ban on overall crypto adoption across the U.S. Other states, such as Delaware, New Jersey, and Michigan, are also exploring formal bans against crypto ATMs, while Missouri has not formalized a state-wide ban but has accused operators like CoinFlip of being 'gateways for fraud.'
