Tennessee Commerce Committee advances bill to ban crypto ATMs, citing scams against seniors

Representative Rey introduced House Bill 255 to prohibit the operation or use of cryptocurrency ATMs in Tennessee, saying the kiosks are increasingly used in frauds that target older residents.

The bill’s sponsor told the committee that a recent investigation by the Iowa attorney general found a large share of transactions at crypto ATMs were associated with fraudulent activity. "These ATMs allow fast, hard‑to‑trace transfers of money," the sponsor said, arguing a ban would protect vulnerable people.

Sheriff Casey Cox of Cumberland County, testifying for the Tennessee Sheriffs' Association, described how scammers use fear and urgency to convince victims to withdraw cash and deposit it at crypto ATMs. Cox said criminals instruct victims to scan QR codes and send funds that are then converted to Bitcoin and transferred to criminal wallets, often making recovery difficult. "We had a case two days ago where a woman lost $300,000 using a Bitcoin ATM," Cox said, and he urged the committee to act to protect seniors.

Amy Hazlet of the Tennessee Bankers Association told lawmakers banks routinely see customers withdraw sums ranging from $10,000 to $30,000 to comply with scammers’ instructions. Hazlet said industry estimates indicate at least 90% of transactions at these machines are fraudulent and that banks support the bill because the kiosks have "no legitimate purpose" in local retail settings.

Committee members thanked the witnesses and expressed concern about elder exploitation. No amendments were offered and the committee voted to advance House Bill 255 to calendar and rules; the clerk announced the vote as 19 yes, 0 no.

Next steps: HB 255 will be placed on the calendar and considered by Rules; no further committee amendments were recorded at this hearing.