Thousands of ATMs Shut Down Simultaneously, Bankrupted by New Government Regulations

Jakarta, CNBC Indonesia - The cryptocurrency asset industry has been shaken by more bad news. Global crypto ATM giant Bitcoin Depot, which is listed on the Nasdaq in the United States, has officially halted all its service operations and filed for Chapter 11 bankruptcy protection. The Atlanta-based company voluntarily filed for bankruptcy in the US Bankruptcy Court for the Southern District of Texas on Monday, local time. The move was taken to liquidate and sell the company’s assets in accordance with legal provisions. As a result of this decision, the company’s entire network of Bitcoin ATM machines is now reportedly offline. This is a stark turnaround for a firm that had been expanding aggressively. As of last year, Bitcoin Depot operated at least 9,276 kiosks across the US, Canada, and Australia. These facilities previously allowed customers to convert cash directly into cryptocurrencies like Bitcoin. The bankruptcy filing is the culmination of a rapidly deteriorating financial performance. According to its first-quarter 2026 report, Bitcoin Depot recorded a sharp 49% year-on-year decline in revenue. The company also suffered a net loss of US$9.5 million (approximately Rp152 billion), a dramatic fall from the US$12.2 million net profit it enjoyed in the same period the previous year. Gross profit similarly plunged by 85% to just US$45 million. Management has bluntly pointed to increasingly strict and complex government regulations as the main culprit behind the business’s collapse. ‘States are imposing stricter compliance obligations, including new transaction limits, and in some jurisdictions, direct restrictions or outright bans on BTM (Bitcoin ATM) operations. Operators face increased litigation and regulatory enforcement,’ said CEO Alex Holmes in a press release. Holmes added that the latest regulatory dynamics have severely impacted Bitcoin Depot’s operations and finances, making the company’s business model no longer tenable. Beyond regulatory pressure, Bitcoin Depot is also entangled in significant legal issues. The company faces high-level lawsuits led by the Attorneys General of Massachusetts and Iowa over allegations of facilitating crypto-based fraud. Globally, fraud cases utilising crypto ATMs have skyrocketed, hitting a record US$389 million in losses last year, a 58% increase from 2024. This surge in criminal activity has prompted regulators and law enforcement to act more aggressively. Currently, Bitcoin Depot’s Canadian subsidiary is also involved in the US bankruptcy proceedings, while other non-US entities are set to be gradually wound down in accordance with local jurisdictional regulations. Ironically, Bitcoin Depot’s downfall comes amid a trend of expanding institutional adoption of the crypto industry, driven by the availability of alternative investment products like ETFs and regulatory clarity from the Clarity Act.