North America's largest operator of Bitcoin ATMs has filed for bankruptcy and shut down its entire kiosk network. The Bitcoin Depot bankruptcy was triggered when Atlanta-based Bitcoin Depot Inc. (Nasdaq: BTM) submitted voluntary Chapter 11 petitions to the U.S. Bankruptcy Court for the Southern District of Texas.
More than 9,000 kiosk locations across 47 U.S. states went offline simultaneously, in addition to the international business. As a result, the proceedings target an orderly wind-down of operations and the sale of assets under court supervision. The filing lists assets and liabilities at USD 10 million to USD 50 million each. Therefore, the story ends for the largest publicly traded crypto ATM provider to date, which only reached the Nasdaq through a SPAC merger in 2023. Moreover, this is the largest bankruptcy case the industry has experienced so far.
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Regulatory pressure as the central trigger
CEO Alex Holmes cites the regulatory tightening as the main reason. "The regulatory environment for BTM operators has changed significantly. The company's current business model is no longer viable," he stated in the press release. In recent months, several U.S. states have taken tough measures against crypto ATMs.
In March 2026, Indiana became the first state to fully ban the operation of Bitcoin ATMs, with Tennessee following in April and Minnesota afterward. At the same time, Connecticut suspended Bitcoin Depot's money transmission license and in April issued a preliminary cease-and-desist order aimed at revoking the license. In addition, Massachusetts Attorney General Andrea Campbell filed suit in February over alleged aiding and abetting of crypto fraud. Furthermore, the Iowa Attorney General also took legal action over misleading pricing and the tolerance of known fraud patterns.
The pressure has a quantifiable backdrop. In 2025, the FBI registered a total of 13,460 complaints regarding fraud at crypto kiosks. Reported damages totaled USD 389 million, an increase of 58% compared to the prior year. Bitcoin Depot's business model relied on high transaction fees and targeted primarily unbanked population groups, that is, exactly the clientele that appears disproportionately as victims in the FBI statistics.
Financial erosion at record speed
The quarterly figures document an abrupt collapse. Revenue in the first quarter of 2026 dropped to USD 83.5 million, a decline of 49.2% compared to the year-earlier quarter. Gross profit fell from USD 31.2 million to USD 4.5 million, a decrease of 85.5%. As a result, a net profit of USD 12.2 million turned into a net loss of USD 9.5 million. Operating costs rose by 32.3%, driven by legal and compliance expenses.
Accordingly, the liquidity situation deteriorated rapidly. Cash holdings fell from USD 65.6 million to USD 44.0 million between December 2025 and March 2026. In the fourth quarter of 2025 alone, more than USD 20 million accrued in legal judgments and settlement costs. In addition, a hacking attack in April 2026 drained another USD 3.7 million from the company's crypto wallets. Moreover, management reported a "material weakness" in cash-in-transit reconciliation, which is why the Q1 report did not appear on time.
The stock reacted accordingly. BTM lost 79.5% of its value in the six months preceding the bankruptcy filing. Following Friday's closing price of USD 2.93, the stock slipped to roughly USD 0.77 in premarket trading, a decline of 74%. Market capitalization at the time of the bankruptcy stood at only around USD 9.73 million.
Bitcoin Depot bankruptcy: wind-down without DIP financing
Several subsidiaries are part of the proceedings, including BCD Merger Sub LLC, BitAccess Inc., Bitcoin Depot Operating LLC, and BT HoldCo LLC. The court is also integrating the Canadian entities into the U.S. process. However, other international companies are being wound down under local law. The bankruptcy filing triggered a default under the existing term loan credit agreement. Nevertheless, enforcement actions by creditors are automatically stayed under bankruptcy law.
Notably absent is debtor-in-possession financing. Bitcoin Depot did not communicate an external liquidity bridge. Instead, much suggests that the sale process will run from the existing USD 44 million cash holdings. To steer the proceedings, the company appointed Ivona Smith to the Restructuring Committee, with compensation of USD 30,000 per month plus per diem rates. Furthermore, Vinson & Elkins LLP acts as legal counsel, Portage Point Partners as restructuring advisor, and Kroll Restructuring Administration handles claims administration.
All employees received WARN Act termination notices. The dismissals at the executive level take effect on 17 July 2026, in line with the statutory 60-day period. Holmes himself had only assumed the CEO role in March 2026, in the middle of the escalation phase of the regulatory disputes.
Consolidation in the crypto ATM sector
Bitcoin Depot was founded in 2016 in Atlanta and was considered the market leader by a wide margin. The second-largest provider, CoinFlip, operates around 5,289 ATMs and holds a global market share of 13.6%. In the U.S., roughly 29,851 Bitcoin ATMs were in place at the start of 2025, with the global market size at around USD 356 million. With the loss of more than 9,000 locations, the industry structure changes considerably.
The case fits into a longer series of insolvencies. For example, Coin Cloud, another U.S. crypto ATM operator, had already filed for bankruptcy in 2023. Notably, Bitcoin Depot was still buying treasury Bitcoin in the second quarter of 2025, crossing the 100 BTC mark with purchases of 51 and 11 BTC. As a result, the crisis escalated dramatically within just a few quarters, driven less by operational missteps than by a coordinated regulatory wave at the state level.
For the remaining providers, the case serves as a warning signal. The regulatory reasoning of the states directly targets the core business model: high fees for cash-to-crypto exchange combined with compliance gaps in money laundering prevention and fraud protection. As long as the FBI continues to report rising fraud damages and states use bans as well as license revocations as tools, the cash kiosk model remains under structural pressure. On 17 July 2026, the effective date of the WARN Act terminations marks the formal end of Bitcoin Depot.
