MURFREESBORO, Tenn. (WGNS News) - Investigative evidence gathered by the Murfreesboro Police Department helped Tennessee become only the second state in the nation to completely ban Bitcoin and other cryptocurrency ATM machines.
The Tennessee General Assembly approved House Bill 2505, enacted as Public Chapter 766, during the 2026 legislative session. The law was signed by Gov. Bill Lee and took effect July 1.
MPD’s Criminal Investigations Division provided state lawmakers with evidence showing that victims in Murfreesboro lost nearly $4.1 million through cryptocurrency kiosk scams during a six-month period.
Fraud Detective Sgt. Tommy Massey and MPD’s Fraud Unit investigated schemes in which criminals allegedly impersonated law enforcement officers and frightened elderly residents by claiming they had outstanding warrants.
Victims were reportedly instructed to withdraw money from their bank accounts and deposit it into Bitcoin ATM machines to supposedly “clear” their names.
Massey said money transferred to a cryptocurrency wallet is nearly impossible to recover.
“The new state law benefits both law enforcement and users,” Massey said. “It reduces the number of cryptocurrency scams. These machines also charge exorbitant fees, up to 40 percent, to convert currency into Bitcoin.”
Approximately 30 Murfreesboro businesses have been identified as locations with Bitcoin ATMs. MPD detectives and officers plan to visit those businesses to explain the new law and ensure that the machines are no longer being operated.
Businesses that fail to comply could face state criminal charges. Knowingly installing, permitting, placing or operating a virtual currency kiosk is now a Class A misdemeanor in Tennessee.
A conviction could result in a maximum sentence of 11 months and 29 days in jail and a fine of up to $2,500.
Tennessee Attorney General Jonathan Skrmetti announced earlier in July that a federal court had allowed the cryptocurrency ATM ban to take effect while a legal challenge continues.
The court rejected an attempt by members of the cryptocurrency ATM industry to temporarily block enforcement of the law.
“Cryptocurrency ATMs are tools for scammers targeting vulnerable Tennesseans and are rarely used for anything approaching a legitimate purpose,” Skrmetti said in a news release. “The General Assembly recognized that these machines benefit fraudsters at the expense of everyday citizens, and the Court recognized the strong public interest in allowing this law to take effect while the case proceeds.”
Tennessee joins Indiana as the only two states to enact complete bans on Bitcoin and cryptocurrency ATM machines.
