Bitcoin Depot Files for Bankruptcy and Shuts Down ATM Network

Bitcoin Depot, once the largest operator of cryptocurrency kiosks in North America, has filed for Chapter 11 bankruptcy and permanently deactivated its entire network of more than 9,000 machines [1, 2]. The Atlanta-based company, which trades on the Nasdaq, initiated the court-supervised wind-down in the U.S. Bankruptcy Court for the Southern District of Texas on May 18, 2026 [2, 3].

The collapse follows a period of severe financial and regulatory pressure. In the first quarter of 2026, the company reported a 49% year-over-year revenue decline, swinging from a $12.2 million profit to a $9.5 million net loss [1, 3]. Its gross profit dropped 85% to $4.5 million during the same period [3]. As financial performance deteriorated, the company’s stock price fell nearly 80% in the months leading up to the filing [1].

CEO Alex Holmes, who took over the role just two months ago, cited an "unsustainable" business model driven by increasingly stringent state regulations [1, 3]. Operators have faced a wave of new compliance requirements, including transaction limits and outright bans on Bitcoin ATM (BTM) deployments in states like Tennessee and Indiana [1, 2]. Beyond regulatory hurdles, the company is defending against a high-profile lawsuit brought by the attorneys general of Massachusetts and Iowa, who allege the firm facilitated crypto scams [3]. These legal challenges coincide with a broader industry crisis, as reported losses from crypto ATM fraud reached $389 million last year [3].

The company’s operational woes were compounded by a security breach disclosed in March, where hackers stole $3.7 million from its cryptocurrency wallets [1]. Efforts to diversify, such as the acquisition of the social-betting platform Kutt and the launch of the BDCheckout retail service, failed to offset the mounting costs of litigation and compliance [1].

The bankruptcy process will now focus on an orderly liquidation and the sale of remaining assets to maximize value for creditors [2]. While the company’s U.S. and Canadian subsidiaries are included in the court-supervised proceedings, its other international entities will wind down according to local laws [2, 3]. The exit of such a dominant player raises questions about the future viability of cash-to-crypto kiosks as regulators continue to prioritize consumer protection over the growth of anonymous, cash-based digital asset access.