Bitcoin depot files for bankruptcy, shuts down crypto ATMs

Bitcoin Depot has gone from being North America’s largest Bitcoin ATM operator to filing for bankruptcy and shutting down its entire network of ATMs, citing state regulations and unsustainable business models as reasons.

The Atlanta-based crypto company, listed on Nasdaq under the ticker BTM, has filed for Chapter 11 in the U.S. Bankruptcy Court in Texas. The company also plans to sell its assets through a court-supervised process as its operations close down.

Financial collapse led to Bitcoin Depot’s bankruptcy

Bitcoin Depot’s Q1 2026 revenue dropped by almost 50% compared to the same Q1 one year earlier. Gross profit nosedived by a whopping 85% to $4.5 million, and the company posted a $9.5 million net loss after earning $12.2 million in revenue just a year ago.

Bitcoin Depot charged retail customers fees between 8% and 20% per transaction at ATM kiosks placed in grocery stores, gas stations, and pharmacies. This fee structure made sense when buying Bitcoin on a phone felt intimidating to casual users. This has stopped being the case, as Coinbase, Cash App, and other regulated apps have joined the market, bringing transaction costs below 1%.

The maintenance of over 9,000 physical ATM machines while transaction volumes continued to dwindle created a cost problem that reduced the company’s revenue even before regulators came into the picture.

Unfriendly regulations added to financial pressure

According to the bankruptcy filing, several states introduced transaction limits and stricter compliance requirements that increased operational pressure on the business, as mentioned by Bitcoin Depot CEO Alex Holmes.

The states imposed demanding licensing requirements for operators and daily/monthly limits on transactions. Some states even banned crypto ATM operations in totality.

Holmes said the cumulative impact of these measures “materially affected Bitcoin Depot’s business and financial position,” adding that the company’s existing business model had become “unsustainable” under the current regulatory landscape.

In addition, Massachusetts Attorney General Andrea Campbell had sued Bitcoin Depot in February, alleging the company’s ATMs facilitated crypto scams targeting the state’s residents. Investigators found that more than half of Bitcoin Depot’s revenue from its ATM machines in Massachusetts was linked to scam-related transactions, and consumers in the state lost over $10 million through alleged scams connected to the machines.

Connecticut’s Department of Banking also issued a temporary cease-and-desist order in April 2026, moving to revoke Bitcoin Depot’s license in the state.

Is the crypto ATM sector collapsing?

Bitcoin Depot’s rapid decline raises questions about the viability of the crypto ATM business. Reported losses from crypto ATM fraud hit a record $389 million last year, up 58% from 2024, according to previous reporting by Cryptopolitan. This surge in fraud cases directly led to the regulatory scrutiny that Bitcoin Depot and others within the crypto ATM industry now face.

The company went public in 2023 when there was little retail exposure and access to cryptocurrencies. The landscape has since shifted, and there are now multiple apps, platforms, ETFs, and payment services that offer cheaper and faster ways to buy crypto without visiting a crypto ATM.

Bitcoin Depot’s Canadian entities will be included in the U.S. proceedings, with separate restructuring expected in Canada. Other international subsidiaries will gradually wind down services with respect to local laws.

The company operated in 47 U.S. states and offered its BDCheckout service at retail locations in 31 states before going offline. It remains unknown if this is a one-off in the crypto ATM sector, and if the demand would be absorbed by competitors, or if this is a sign of an impending total collapse of the industry.

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