Hundreds of California ATMs closing as regulations strangle operator

A major Bitcoin ATM operator that once had a significant presence across the nation has filed for bankruptcy due to stringent state regulations, particularly in California, which severely impacted its business operations.

Bitcoin Depot, based in Atlanta, voluntarily submitted for Chapter 11 bankruptcy in the Southern District of Texas, signaling the start of winding down operations and liquidating assets, as reported by The Sun.

The fintech company operated around 9,700 Bitcoin ATMs nationwide, primarily in convenience stores and gas stations. However, its presence in California dwindled to less than 200 kiosks, a stark contrast to its previous status as the state’s largest Bitcoin ATM operator that installed 200 machines in 2020 alone.

The decline in California was attributed to the state’s SB401 legislation, which imposed a $1,000 daily Bitcoin ATM purchase limit, hampering the company’s expansion efforts.

Bitcoin Depot informed customers on its website about California’s unique $1,000 daily purchase limit for Bitcoin ATMs, redirecting users seeking higher transactions to alternative online purchase options.

The financial impact was evident in the company’s financial reports, with a 25% year-over-year revenue decrease to $135.3 million in the third quarter of 2024, primarily due to unfavorable California legislation and efforts to relocate underperforming kiosks.

Despite posting a net income of $2.3 million in the quarter and maintaining 8,300 machines by September 2024, Bitcoin Depot faced ongoing regulatory challenges, leading to the decision to file for bankruptcy.

CEO Alex Holmes acknowledged the increasing stringent regulations facing Bitcoin ATM operators, making the company’s current business model unsustainable, as reported by The Sun.

Bitcoin Depot listed assets and liabilities ranging between $10 million and $50 million in its bankruptcy filings.

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