As Bitcoin ATM regulations tighten, Bitcoin Depot files for Chapter 11 bankruptcy.
Bitcoin Depot, North America’s largest Bitcoin ATM operator with a network of approximately 9,000 kiosks, is ceasing operations after mounting regulatory pressure and legal challenges forced the Bitcoin ATM operator into Chapter 11 bankruptcy proceedings.
The Nasdaq-listed company said Monday it has voluntarily filed with the U.S. Bankruptcy Court for the Southern District of Texas to facilitate an orderly liquidation and asset sale.
The news follows a “continuing concern” warning from Bitcoin Depot, issued after reporting a steep decline in revenue and increasing regulatory issues. The company said the ongoing legal battle and compliance burden could threaten its long-term survival.
The Bitcoin ATM operator reported preliminary first-quarter revenue of approximately $83.5 million, down 49% year-over-year, and posted a net loss of $9.5 million. Bitcoin Depot said regulatory changes and increased compliance measures have led to a decline in transaction volume across its kiosk network.
At the same time, the company is dealing with lawsuits from regulators in several states over claims that its ATMs failed to adequately prevent fraud and scams. The warning comes amid increasing scrutiny of cryptocurrency ATMs in the United States, with authorities linking the machines to a rise in fraud targeting consumers, including the elderly.
CEO Alex Holmes claimed that stricter compliance requirements, transaction limits, regulatory enforcement actions and outright restrictions on Bitcoin ATM operations in some jurisdictions have severely damaged the company’s financial position.
Holmes noted that Bitcoin Depot has introduced stronger anti-fraud measures over time, including improved identity verification systems, customer alerts, and lower transaction limits. Nonetheless, he said the company’s operating model is no longer viable due to the current regulatory environment.
Bitcoin Depot’s ATM network has been taken offline and the company’s Canadian unit is participating in a U.S.-supervised restructuring process. Other foreign subsidiaries are expected to be closed in accordance with local legal frameworks.