Tennessee Bans Bitcoin ATMs After $4.1 Million Lost in Scams

The state of Tennessee has become the second in the nation to ban Bitcoin and other cryptocurrency ATM machines, thanks in part to evidence gathered by the Murfreesboro Police Department. The law, which was enacted as Public Chapter 766, took effect on July 1 after being signed by Governor Bill Lee.

The MPD's Criminal Investigations Division provided lawmakers with evidence showing that nearly $4.1 million was lost through cryptocurrency kiosk scams in Murfreesboro over a six-month period. Fraud Detective Sgt. Tommy Massey and the MPD's Fraud Unit investigated schemes where criminals impersonated law enforcement officers, frightening elderly residents into withdrawing money from their bank accounts and depositing it into Bitcoin ATM machines to supposedly 'clear' their names.

Massey noted that once money is transferred to a cryptocurrency wallet, it is nearly impossible to recover. He also stated that these machines charge exorbitant fees, up to 40 percent, to convert currency into Bitcoin.

Tennessee Attorney General Jonathan Skrmetti announced that the federal court had allowed the 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.