# Major Crypto Firms Continue Supplying Bitcoin to ATM Operators

**Published:** 2026-05-26T22:04:13.000Z  
**Topic:** Crypto Scam  
**Sentiment:** neutral  
**Publisher:** TrendWatcher — https://www.trendwatcher.in/article/fb50c534-2a2f-4458-82c2-a02ae7727b97

While states move to ban bitcoin ATMs due to fraud concerns, major cryptocurrency exchanges continue providing liquidity to the machine operators.

As governments across the United States and Canada move to restrict or ban bitcoin ATMs due to their frequent use in criminal scams, major cryptocurrency firms continue to supply these operators with billions of dollars in bitcoin [1]. Although authorities have issued repeated warnings about the machines being used to facilitate money laundering and fraud, prominent exchanges have maintained business relationships with the ATM companies that rely on them for liquidity [1].

**Key takeaways**
* Tennessee, Minnesota, and Indiana have passed legislation to outlaw bitcoin ATMs, while the Canadian government has proposed a similar ban [1, 2].
* Kraken, Gemini, and Cumberland DRW are among the major crypto firms that have provided significant bitcoin supplies to ATM operators [1].
* Kraken transferred at least $17 million in cryptocurrency to Athena Bitcoin after D.C. authorities alleged the machines were being used to exploit vulnerable residents [1].
* Between 2018 and 2024, Bitstamp sent at least $7 million to Crypto Dispensers, a firm later indicted for money laundering [1].
* FBI data indicates that $11.3 billion of the $30 billion lost to scams last year was linked to cryptocurrency ATMs [2].

## The flow of liquidity to ATM networks
The business model of bitcoin ATMs relies on a steady supply of cryptocurrency to convert cash deposits into digital assets [1]. To maintain these operations, ATM companies require large-scale liquidity providers [1]. Investigations have revealed that even after attorneys general in jurisdictions like Massachusetts, Iowa, and Washington, D.C., alleged that top operators were dealing in scam transactions, major crypto firms continued to sell them large sums of bitcoin [1]. 

For example, Gemini provided more than half a billion dollars in bitcoin to Bitcoin Depot between May 2020 and March 2025 [1]. Similarly, Kraken has transferred at least $1.1 billion worth of bitcoin to various ATM operators in recent years [1]. While these crypto firms maintain that they conduct rigorous onboarding and compliance monitoring, experts suggest that these exchanges hold the power to shut down the ATM networks by withholding liquidity [1]. Some ATM operators, such as Bitcoin Depot, have denied wrongdoing, arguing they cannot be held liable for the criminal acts of third parties who use their machines [1].

## The regulatory and criminal landscape
The rapid proliferation of bitcoin ATMs has created a significant challenge for law enforcement, as the machines allow for the near-instantaneous, anonymous transfer of funds across borders [1, 2]. Because these transactions are often irreversible, victims of romance scams and other fraud schemes frequently lose their money without any hope of recovery [1, 2]. In one instance, an Iowa attorney general’s lawsuit alleged that more than half of the transactions processed by Bitcoin Depot machines in the state between October 2021 and July 2024 were linked to scams [1].

## Why it matters
The tension between the crypto industry’s desire for mainstream financial integration and its continued support of ATM operators highlights a growing regulatory divide [1]. While some crypto firms are seeking approval for master accounts with the Federal Reserve, they remain deeply connected to a sector that lawmakers are actively trying to dismantle to protect consumers [1]. As states like Tennessee move to ban the kiosks to curb money laundering, the future of these machines remains uncertain, particularly as major operators like Bitcoin Depot face bankruptcy and ongoing litigation [1, 2].

## Sources
1. International Consortium of Investigative Journalists — [Amid a scam crackdown, crypto giants keep fueling bitcoin ATMs](https://www.icij.org/investigations/coin-laundry/amid-a-scam-crackdown-crypto-giants-keep-fueling-bitcoin-atms/)
2. AOL — [Tennessee becomes second state to ban crypto ATMS amid rise in fraud, money laundering concerns](https://www.aol.com/news/tennessee-becomes-second-state-ban-215158563.html)

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Cite as: TrendWatcher, "Major Crypto Firms Continue Supplying Bitcoin to ATM Operators", https://www.trendwatcher.in/article/fb50c534-2a2f-4458-82c2-a02ae7727b97