Bitcoin Depot files Chapter 11 as regulators shut down crypto ATM industry
In brief
- Bitcoin Depot filed Chapter 11 bankruptcy on May 18, taking 9,700 machines offline.
- Q1 2026 revenue fell 49.2% YoY; gross profit collapsed 85.5% to $4.5 million.
- FBI logged 13,460 crypto kiosk fraud complaints in 2025, up 58% from 2024, totaling $389 million.
- Canadian authorities proposed complete ban on crypto ATMs over fraud and money laundering.
- Bitcoin ATM fees ranged 10–30% per transaction, with irreversible transfers once sent.
The numbers tell the story
Bitcoin Depot's financial deterioration was swift and severe. Revenue fell 49.2% year-over-year in Q1 2026, a drop of $80.7 million. More striking: gross profit collapsed 85.5%, falling from $31.2 million to just $4.5 million. The company swung from a $12.2 million profit in the prior year to a $9.5 million net loss.
CEO Alex Holmes attributed the collapse to a business model he described as "unsustainable." That model rested on a simple premise: Bitcoin ATMs enabled people to buy Bitcoin without verification, a bank account, or any real understanding of how custody works. Fees typically ranged from 10% to 30% per transaction, creating a high-margin business for operators. But that convenience came with costs regulators could no longer ignore.
Fraud and the elderly
Bitcoin ATMs became a preferred tool for scammers targeting vulnerable populations. The FBI logged 13,460 crypto kiosk fraud complaints in 2025 alone, representing $389 million in reported losses, a 58% jump from the prior year. Adults aged 60 and older were disproportionately affected.
The mechanics of these schemes are brutal. Phone-based social engineering campaigns coached elderly victims through ATM transactions across multiple states. Once the funds moved, they were gone forever. "When a Bitcoin ATM sends funds to a wallet controlled by a scammer, the transaction settles on the blockchain and stays there forever, with no authority capable of reversing it."
Regulatory response
Canadian authorities proposed a complete ban on crypto ATMs, citing them as a primary channel for fraud and money laundering. Other jurisdictions tightened rules. The industry that once promised to democratize Bitcoin access had become, in regulators' eyes, a liability.
