Bitcoin ATM Operator Bitcoin Depot Files Chapter 11 Bankruptcy

Key Insights:

• The Nasdaq listed company previously operated more than 9,000 Bitcoin ATMs across North America and Australia.
• Bitcoin Depot’s financial performance tanked sharply with revenue falling 49% and gross profit collapsing 85%.
• Bitcoin Depot is also facing lawsuits and growing scrutiny over alleged crypto ATM scam activity.

Bitcoin Depot, one of North America’s largest crypto ATM operators, filed for Chapter 11 bankruptcy on May 18 in the Southern District of Texas.

The Nasdaq-listed firm said it would shut down operations and liquidate assets after rising compliance costs, lawsuits, and tighter regulations severely damaged the business. Its ATM network has already gone offline.

Regulatory Pressure Crushed the Business

Bitcoin Depot previously operated more than 9,000 kiosks across the United States, Canada, and Australia. Customers used the machines to convert cash into Bitcoin through convenience stores and retail locations during the peak of the retail crypto boom.

That model came under pressure over the past year as regulators tightened oversight around crypto ATM activity. Several states imposed stricter compliance obligations, reduced transaction limits, and increased enforcement tied to fraud prevention. Some jurisdictions also moved toward restricting or banning certain kiosk operations entirely.

Chief Executive Officer Alex Holmes said the company could no longer sustain operations under the current environment. The bankruptcy filing also pointed to mounting litigation costs and growing pressure tied to investigations into crypto-related scams.

The industry itself has faced increasing criticism from regulators and lawmakers who argue that crypto kiosks became an easy channel for fraud schemes targeting retail users, especially elderly victims.

Bitcoin Depot Gross Profits Tank 85%

Last year in 2025, the company reported its peak operations of 9,276 kiosks across retail locations in the United States, Australia, and Canada. These Bitcoin ATM kiosks allowed users to convert their cash into BTC.

Interestingly, the company managed to go public back in 2023, on the Nasdaq exchange. However, it soon started showing signs of financial pressure after its first quarterly earnings reports, which showed a 49% drop in revenue.

During the same period, the company shifted from a $12.2 million profit to a $9.5 million loss. Moreover, the gross profits also tanked by a massive 85% to $4.5 million.

As of the pre-market trading on Monday, May 18, the Bitcoin Depot stock price (NASDAQ: BTM) crashed 75%. The BTM stock is now trading for less than a dollar.

Allegations of Supporting Bitcoin ATM Scams

As of now, Bitcoin Depot is facing a major lawsuit led by the attorneys general of Massachusetts and Iowa. The firm faces strong accusations of supporting several cryptocurrency-related scams.

The legal action comes as crypto ATM fraud reached a record $389 million in reported losses last year. It marks a 58% surge in comparison to that in 2024.

The sharp rise in fraud cases has triggered increased scrutiny of Bitcoin ATM operators. Popular investigator ZachXBT pointed out the fraud practices at Bitcoin Dept last month, in April.

ZachXBT criticized Bitcoin Depot over alleged practices involving crypto ATM transactions and fraud prevention. According to ZachXBT, an elderly fraud victim in the United States was recently allowed to convert $25,000 in fiat currency into Bitcoin through a Bitcoin Depot ATM.

The investigator claimed the transaction valued Bitcoin at approximately $108,000 per BTC despite the market price being near $75,000 at the time. ZachXBT stated the customer received 0.232 BTC, valued at around $17,500 based on prevailing market rates.

ZachXBT further argued that the difference represented roughly $7,500 in excess costs. The blockchain investigator also alleged that Bitcoin Depot was recently exploited for approximately $3.26 million, or 54 BTC. He noted that this theft went undetected for several days.

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