Bitcoin Depot, the largest bitcoin ATM operator in North America, has filed for Chapter 11 bankruptcy and plans to shut down operations while exploring a sale of its assets.
The collapse is more than just the failure of one company—it may signal the unraveling of the bitcoin ATM industry itself, a business that once promised to bring cryptocurrency to the financial mainstream but increasingly became associated with high feeds, scams, and regulatory scrutiny.
Five years ago, bitcoin ATMs looked like a glimpse into the future of finance. They offered a fast, accessible way for consumers—especially the underbanked—to buy crypto with cash at convenience stores and gas stations across the country. At its peak, Bitcoin Depot operated nearly 10,000 kiosks, helping turn crypto from a niche interest asset into something consumers could physically interact with in everyday life, per ATM Marketplace.
But the business model that fueled that growth began to collapse almost as quickly as crypto itself entered the mainstream.
In a May 12 SEC filing, Bitcoin Depot reported that its Q1 revenue fell $80.7 million year over year—a decline of nearly 50%—while the company posted a net loss of $9.5 million. The filing came just weeks after the company revealed hackers had stolen roughly $3.6 million from corporate wallets.
Undercut by the Apps They Helped Normalize
Ironically, bitcoin ATMs may have helped popularize crypto only to become obsolete once the rest of the financial industry caught up.
When Bitcoin Depot was expanding rapidly, buying crypto was still confusing for many consumers. Mobile exchange were clunky, banking integrations were limited, and cash users had few options. Bitcoin ATMs filled that gap, at a price. The company charged fees ranging from 8% to 20% per transaction.
Today, buying bitcoin is often as easy as buying stock. Coinbase, Cash App, Robinhood, and traditional brokerages now offer crypto purchases with fees below 1%, while spot crypto ETFs have opened the market to mainstream investors through ordinary brokerage accounts.
A Magnet for Fraud and Regulation
The industry’s biggest problem, however, may have been trust.
Bitcoin ATMs became a frequent tool in crypto scams targeting elderly and first-time users. Victims were often instructed by criminals to deposit cash into machines in transactions that were nearly impossible to reverse once recorded on the blockchain. In fact, earlier this year, Massachusetts sued Bitcoin Depot, alleging the company facilitated scams that cost consumers more than $10 million.
At least 15 states have considered legislation aimed at curbing crypto ATM fraud. Many proposals would cap transactions at $1,000 per customer per day and limit fees to either a flat $5 charge or a range between 3% and 15%.
Federal lawmakers have also taken aim at the sector. Last year, Democratic senators introduced the Crypto ATM Fraud Prevention Act, which would have barred new users from spending more than $2,000 per day or $10,000 over a 14-day period at crypto ATMs. The bill also would have required companies to provide full refunds to customers who reported fraudulent transactions to law enforcement within 30 days.
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