Tennessee has placed a statewide ban on crypto ATMs, becoming the second state in the United States, after Indiana, to have outright banned crypto ATMs.

 

The ban on crypto ATMs in the state comes after Bill Lee, Tennessee’s governor, signed House Bill 2505 into law, following its unanimous approval by both the Tennessee House of Representatives and the Senate.

 

House Bill 2505, which has now been passed into the state’s legal code, prohibits the installation or operation of virtual currency kiosks, otherwise known as Bitcoin ATMs, in the state. Any violation of the law will be treated as a criminal offense classified as a Class A misdemeanor, with offenders facing up to one year in prison and a fine of $2,500.

 

Image credit: capitol.tn.gov

 

The law also treats business owners who allow these crypto ATMs to be hosted on their property as accomplices, making them liable under the same offense. Although the bill was signed into Tennessee’s legal code last Thursday, it will take effect on July 1.

 

Indiana First to Ban Crypto ATMs

Tennessee’s ban on crypto ATMs comes shortly after Indiana, which on March 9 signed House Enrolled Act 1116 (HEA 1116 into law, banning crypto ATMs in the state and becoming the first U.S. state to do so. The move was prompted by the high levels of fraud and widespread scams associated with crypto kiosks.According to FBI data, about $333 million was stolen through crypto kiosks in 2025 alone. 

 

Prior to the ban, Indiana had nearly 900 crypto ATMs in operation. However, all of these machines were effectively deactivated immediately after Indiana Governor Mike Braun signed House Enrolled Act 1116 into law.

 

Tennessee Takes a Strong Stance on Prediction Markets

Tennessee has, for some time now, taken strong action against prediction market platforms, targeting operators such as Kalshi and Polymarket. In January of this year, the Tennessee Sports Wagering Council (SWC) issued cease and desist orders against major platforms including Polymarket, Kalshi, and Crypto.com, demanding that they stop offering sports event contracts in the state.

 

Kalshi, however, sued the state in the U.S. District Court for the Middle District of Tennessee and won a preliminary injunction. The ruling allowed Kalshi to continue operating in the state while the case proceeds.