Texas lawmakers are preparing legislation that would effectively ban Bitcoin ATMs across the state, responding to a sharp rise in fraud tied to these machines. According to the FBI, Texas residents lost $56.8 million to cryptocurrency kiosk scams in 2025—the highest total of any U.S. state—with roughly 1,200 victims filing complaints. Nationwide, losses soared 58% from the previous year to $389 million, and Texas nearly doubled the amount reported in second‑place Florida.
Scammers exploit Bitcoin ATMs, often located in convenience stores and gas stations, by posing as police, court officials, or government agencies. They pressure victims to withdraw cash, deposit it into the ATM, and the funds are instantly converted to Bitcoin and sent to an irreversible wallet controlled by the fraudster. The FBI warns these machines are increasingly used for money laundering, with funds routed through crypto mixers.
Texas is not the first state to act. Indiana, Tennessee, and Minnesota have already imposed full operating bans, and other states are considering similar measures. The proposed Texas bill goes beyond regulation, seeking to prohibit the operation of all Bitcoin ATMs in the state—approximately 4,000 machines—with penalties for operators who ignore the ban. Earlier legislative drafts had included operator registration, mandatory risk disclosures, transaction limits, and cooling‑off periods for first‑time users, but the scale of losses has pushed lawmakers toward an outright ban.
Industry groups argue that legitimate users depend on these kiosks for cash‑to‑crypto access, but consumer protection concerns dominate. The move could set a national precedent, reshaping the landscape for crypto ATMs. Financial advisors recommend that anyone using a Bitcoin ATM verify the machine’s legitimacy and never send funds to unknown wallets under pressure.
