A federal court decision is allowing Tennessee to move forward with its ban on cryptocurrency ATMs.
The Tennessee General Assembly passed a bill this year enacting an outright ban on cryptocurrency ATMs in the state following concerns that the kiosks were being used to commit fraud. Cryptocurrency ATM industry leaders CoinFlip and Private IT Corp. soon filed a lawsuit seeking to invalidate the law, as well as a request to temporarily block the law.
The U.S. District Court for the Eastern District of Tennessee ruled last week in the state’s favor, allowing the law to go into effect. The court found that while cryptocurrency ATM companies demonstrated that the businesses could be negatively impacted by the ban, that harm is outweighed by “the public interest in enforcing a law enacted through the democratic process,” according to a press release.
“Cryptocurrency ATMs are tools for scammers targeting vulnerable Tennesseans and are rarely used for anything approaching a legitimate purpose,” Tennessee Attorney General Jonathan Skrmetti said in the release.
“The General Assembly recognized that these machines benefit fraudsters at the expense of everyday citizens, and the Court recognized the strong public interest in allowing this law to take effect while the case proceeds. If you see evidence that an elderly relative or friend is trying to make an unusual cryptocurrency transaction, work with them to make sure they’re not being ripped off.”
The new state law makes it a class-A misdemeanor to install, permit, place or operate a virtual currency kiosk in Tennessee.
The lawsuit will continue moving through the court system as the parties litigate constitutional claims within the complaint. The law will remain in effect. Federal Trade Commission data shows consumers lost more than $110 million in scams involving Bitcoin ATM machines in 2023. Tennessee is the second state, after Indiana, to ban the kiosks.
This article was first published by our sister publication, the Nashville Post.
