Major crypto firms kept sending large sums of bitcoin to crypto ATM operators even after regulators accused those operators of helping drive scam transactions. The flow continued as governments from Canada to several U.S. states moved to ban or restrict the machines that turn cash into cryptocurrency in gas stations and smoke shops.
The timing matters because the crackdown is widening just as one of the biggest names in the business, Bitcoin Depot, filed for bankruptcy last week, citing litigation and government action. For people who still use a crypto atm to convert cash into digital coins, the business model is coming under pressure from lawmakers who now see the machines less as a convenience and more as a conduit for fraud.
ICIJ found that Kraken transferred at least $1.1 billion worth of bitcoin to crypto ATM operators in recent years, including $17 million to Athena Bitcoin after District of Columbia authorities singled out its machines last September. District Attorney Brian Schwalb said Athena’s bitcoin machines had become a tool for criminals intent on exploiting elderly and vulnerable residents, a description that captures the political and legal pressure now building around the sector.
The money kept moving elsewhere too. Between May 2020 and March 2025, Gemini provided more than half a billion dollars in bitcoin to Bitcoin Depot, while Cumberland DRW was a major supplier to Bitcoin Depot and CoinFlip. Bitstamp sent at least $7 million to Crypto Dispensers between 2018 and 2024, even though Crypto Dispensers later used its ATM network for money laundering during a period covered by a federal indictment against founder Firas Isa.
That is what makes the latest crackdown more than a local regulatory fight. Authorities and experts have warned for years that bitcoin ATMs are heavily used by criminals collecting funds from scam victims, and the machines remain tied to some of the crypto industry’s most mainstream firms. ICIJ said investigators traced billions of dollars in bitcoin transfers from brand-name crypto companies directly to ATM companies, leaving open a harder question that regulators have not yet answered: how much of that money ultimately flowed into scams or other crimes.
For now, the market is being squeezed from both ends. Governments are tightening the rules, bankruptcy is hitting operators, and the big crypto firms that helped feed the network are still being measured against the fraud risks their money helped sustain.
