Key takeaways
- A federal court has rejected an emergency request to block Tennessee’s cryptocurrency ATM ban before its July 1 effective date.
- Public Chapter 766 remains enforceable while constitutional challenges from CoinFlip and Private IT Corporation move forward.
- The court found that the public interest favored enforcement of the law, even though the plaintiffs demonstrated that the law would cause economic harm.
Why Did Tennessee’s Cryptocurrency ATM Ban Survive Its First Legal Test?
Federal court refused to stop Tennessee cryptocurrency The ATM ban before it takes effect, Attorney General Jonathan Skrmetti announced on July 7. The decision followed a lawsuit filed by GPD Holdings, LLC, doing business as Coinflip, and Charles Wernicke, CEO of Private IT Corporation. The plaintiffs requested a temporary restraining order blocking Public Chapter 766 before its July 1 implementation.
The court found that the plaintiffs had failed to meet the legal standards for emergency injunctive relief. Although the companies demonstrated economic harm, the court said that did not outweigh the public interest in allowing a law passed by the Tennessee General Assembly to go into effect. The case will continue as long as the law remains enforceable.
Skrmetti welcomed the decision and equalized cryptocurrency ATM fraud targeting vulnerable residents. He said:
” Cryptocurrency ATMs are tools for fraudsters targeting vulnerable Tennesseans and are rarely used for legitimate purposes.
He also urged people to be careful of unusual phenomena cryptocurrency transactions involving elderly relatives or friends who could be victims of fraud.
Coinflip is one of the largest cryptocurrency ATM operators, with more than 5,500 Bitcoin ATMs in 48 US states and several countries. Private IT Corporation is a small operator that joined the lawsuit after the Tennessee ban threatened its local operations.
How far are states willing to go against crypto ATMs?
Indiana, Vermont and Tennessee have banned cryptocurrency ATMs entirely as states respond to scams involving irreversible crypto payments. Others are taking tougher steps: Delaware has proposed a possible ban, North Carolina and Virginia have adopted stricter rules, and Texas is exploring fraud control without banning the machines.
The industry is fighting back with lawsuits, lobbying and public relations campaigns. Operators argue that transaction limits, fraud warnings, registration rules and stricter Know Your Customer controls would protect consumers without banning the machines.
What does Public Chapter 766 prohibit and what happens next?
The Tennessee Attorney General’s Office defended the law on behalf of the state and the Tennessee Department of Financial Institutions. The measure aims to protect consumers by limiting state agents’ machines linked to fraud. The announcement details:
“Public Chapter 766 makes it a Class A misdemeanor to knowingly install, license, place, or operate a virtual currency kiosk in Tennessee. The legislation was passed following testimony before the General Assembly regarding the growing use of crypto ATMs in scams that have cost victims millions of dollars nationwide.”
The court also considered the plaintiffs’ constitutional appeals and found that they had no probable chance of success. She further concluded that the alleged constraints on interstate commerce did not clearly outweigh Tennessee’s interest in preventing fraud and protecting consumers.
The broader lawsuit remains active and future proceedings will determine whether Public Chapter 766 survives the constitutional challenge. Until then, Tennessee’s crypto ATM ban remains in effect.
Coinatmradar data shows global crypto ATM crash, from 38,708 to 27,945 machines
The United States has lost 10,763 crypto automated teller machines (ATMs) since the network grew to 38,708 ATMs in 68 days…
Coinatmradar data shows global crypto ATM crash, from 38,708 to 27,945 machines
The United States has lost 10,763 crypto automated teller machines (ATMs) since the network grew to 38,708 ATMs in 68 days…
Coinatmradar data shows global crypto ATM crash, from 38,708 to 27,945 machines
The United States has lost 10,763 crypto automated teller machines (ATMs) since the network grew to 38,708 ATMs in 68 days…
