Tennessee Bans Crypto ATMs After MPD's Fraud Unit Leads Investigation

The state of Tennessee has become the second in the nation to ban cryptocurrency kiosks after evidence gathered by the Murfreesboro Police Department's Fraud Unit helped pass legislation prohibiting them statewide.

The law took effect on July 1, and operating a cryptocurrency kiosk is now a criminal offense punishable by jail time and fines up to $2,500. The state's Attorney General, Jonathan Skrmetti, defended the ban, calling cryptocurrency kiosks 'tools for scammers targeting vulnerable Tennesseans' that are 'rarely used for anything approaching a legitimate purpose.'

According to the MPD, victims lost nearly $4.1 million in just six months through crypto kiosk scams, which often began with phone calls from scammers impersonating law enforcement officers. The scammers would then direct victims to withdraw cash from their bank accounts and deposit it into cryptocurrency kiosks to supposedly clear their names.

Once the cash was converted into cryptocurrency, investigators said recovering the money was nearly impossible due to its fast exchange rate and high transaction fees, which could reach as high as 40% per conversion. MPD Sgt. Tommy Massey stated that many of these cases fall by the wayside because local authorities do not have the capability to work them.