Bitcoin ATMs Took $389M From Scam Victims in 2025 — and Minnesota Says One Operator Hid a 25% Fee: Should You Still Use One?

Minnesota says Bitcoin Depot charged its customers a hidden fee averaging 25% on every kiosk purchase — and then filed a $1.15 billion claim against the bankrupt operator to prove it. If you have ever fed cash into a Bitcoin ATM, that number is the reason to stop and check the receipt: on a $500 purchase, a 25% spread means roughly $125 disappears before you own a single satoshi. This is the verdict on Bitcoin ATMs in November 2026: they are still running, they are still expensive, and after a record $389 million in reported kiosk fraud in 2025, they are the riskiest way most people can buy crypto.

That verdict matters right now because Bitcoin is back under pressure. Bitcoin traded near $77,179 on November 3, 2026, down about 2% in 24 hours, with the Crypto Fear and Greed Index at 26, firmly in "fear" territory. When prices fall, new buyers look for a quick entry — and the machine on the corner looks like the fastest one. It is also, by the numbers below, the most expensive one.

The $1.15 Billion Claim That Exposes the Hidden Fee

Minnesota Attorney General Keith Ellison filed a proof of claim for $1,147,515,430 in Bitcoin Depot's Chapter 11 bankruptcy case on July 29, 2026, according to reporting on the filing. The claim, numbered 1888 in the case In re Bitcoin Depot Inc. et al. (Case No. 26-90528) in the U.S. Bankruptcy Court for the Southern District of Texas, alleges that the company's only disclosure of a fee it charged on every kiosk purchase was, in the filing's words, "a paragraph buried in its dense 'Terms of Service,' which a consumer was not required to read in order to transact at a cryptocurrency ATM and was highly unlikely to read."

The state alleges Bitcoin Depot "did not clearly or conspicuously disclose the Spread Fee to consumers before, during, or after a cryptocurrency transaction." Based on the Minnesota Attorney General's own analysis of operator transaction data, that spread fee averaged 25% and ranged from 10% to 43% on Minnesota purchases. The claim covers a striking footprint: more than 100 Bitcoin Depot kiosks in Minnesota, more than 6,500 consumers, and 45,411 transactions worth $48,483,193 in Bitcoin purchases between February 2021 and May 2026. The state says $11,829,504 of that was retained as what it calls "hidden, illegal Spread Fees."

Two things about this claim deserve emphasis. First, the $1.15 billion headline is not the amount of fees collected. It rests on treating each undisclosed-fee transaction as a separate $25,000 violation under Minnesota consumer-protection law — a multiplier roughly 96 times the actual fees collected in the state. Second, a proof of claim is an allegation in a bankruptcy proceeding, not a court finding that Bitcoin Depot broke the law. Minnesota argues the claim survives the bankruptcy entirely because the underlying violations were, in its words, "the result and consequence of fraudulent and false representations." How much consumers ultimately recover is unresolved. What is not in dispute is the math the state assembled: on average, Minnesota customers paid a quarter of their money in spread.

That spread is separate from any flat operator fee a machine might also show. A kiosk can display a modest-looking service charge while the real cost hides in the exchange rate: the price of Bitcoin the machine quotes you versus the market price at that moment. If the market price is $77,000 and the machine effectively sells at $96,250, you have paid 25% without ever seeing a line item that says so. That is why the first rule of this guide is simple: never judge a Bitcoin ATM by the fee on its screen. Judge it by how much Bitcoin actually lands in your wallet compared with what you paid.

How a $500 ATM Purchase Quietly Becomes $375

Put the fee ranges side by side and the scale of the problem becomes concrete. The U.S. Financial Crimes Enforcement Network (FinCEN) puts typical kiosk fees at 7% to 20%, and independent reporting on Bitcoin Depot's model cites 8% to 20% per transaction. Minnesota's analysis of actual Bitcoin Depot transactions found something worse: 10% to 43%, averaging 25%.

Here is what those percentages do to real purchases:

Amount you insert	At a 1% exchange fee	At a 16% median ATM fee	At Minnesota's 25% average spread
$100	$99 of Bitcoin	$84 of Bitcoin	$75 of Bitcoin
$500	$495 of Bitcoin	$420 of Bitcoin	$375 of Bitcoin
$1,000	$990 of Bitcoin	$840 of Bitcoin	$750 of Bitcoin
$5,000	$4,950 of Bitcoin	$4,200 of Bitcoin	$3,750 of Bitcoin

The table ignores network fees and any flat charge, so the real outcome at a kiosk is slightly worse in every column. But the comparison is the point: buying $1,000 of Bitcoin through a low-fee exchange route costs roughly $10 in trading fees, while the same purchase at Minnesota's average kiosk spread costs roughly $250. You would need Bitcoin to rise 33% just to break even on the spread alone — from $77,000 to more than $102,000 — before you have made a cent.

For the cheaper route, see our step-by-step guide to buying Bitcoin in 2026 and our comparison of the best crypto wallets for beginners.

Why 9,276 Machines Went Dark in a Single Day

Bitcoin Depot was, for years, the dominant force in crypto ATMs. The Atlanta-based company went public through a SPAC merger in 2023 and operated 9,276 kiosks across the United States, Canada, and Australia. Then, on May 17–18, 2026, it filed for Chapter 11 protection in the Southern District of Texas and switched its entire network off the same day. Thousands of users lost the ability to use the machines overnight, and the company said it would wind down operations and sell its assets.

The collapse was not sudden in financial terms. A May 12, 2026 SEC disclosure showed first-quarter revenue down 49.2% year over year, gross profit collapsed by 85.5% to $4.5 million, and a net loss of $9.5 million compared with net income of $12.2 million a year earlier. Management flagged "substantial doubt" about the company's ability to continue as a going concern. CEO Alex Holmes cited rising state regulations, transaction limits, and outright bans in some jurisdictions as making the business model "unsustainable."

He had a point about the regulatory squeeze, and it explains why this story is bigger than one company. Indiana enacted a statewide prohibition on virtual-currency kiosks. Tennessee made installing or operating such kiosks a Class A misdemeanor. Minnesota approved a ban set to take effect in 2026. California caps transactions at $1,000 per person per day. Connecticut's Department of Banking moved to revoke Bitcoin Depot's money-transmission license after finding the company exceeded the state's 15% maximum fee and failed to reimburse consumers for the overcharge. Attorneys general in Massachusetts and Iowa sued the company over alleged facilitation of fraud. On top of that sat more than $20 million in accrued legal judgments and an $18.47 million arbitration award involving its Canadian subsidiary BitAccess.

The deeper problem was structural. Running nearly 10,000 physical machines — cash handling, security, logistics, software, compliance — is expensive. When apps like Coinbase and Cash App began offering sub-1% fees on any smartphone, the kiosk went from a genuine on-ramp for the underbanked to an expensive detour. Stricter identity checks and lower transaction limits then cut throughput further: the compliance measures that made kiosks safer stripped out the volume that had made high fees defensible. Bitcoin Depot's bankruptcy is what happens when a business built on a 20% premium meets a market that will do the same job for 1%.

The $389 Million Fraud Record — and Who Pays It

The most damning number in this story is not a fee at all. It is the fraud total. The FBI's Internet Crime Complaint Center recorded 13,460 complaints tied to crypto kiosks in 2025, with total reported losses of $389 million — a 58% jump from the year before. Adults aged 60 and older accounted for roughly $257.5 million of that figure, about two-thirds of the total. For context, reported Bitcoin ATM fraud was $12 million in 2020, more than $110 million in 2023, and over $65 million in just the first half of 2024, with a median reported loss of $10,000.

The pattern behind those losses is depressingly consistent. The machines became a preferred instrument for "pig butchering" investment scams, tech-support scams, and fake government-impersonation frauds. A victim gets a frightening call or message — a hacked account, an unpaid tax bill, a frozen bank account — and is told to "protect" their money by depositing cash into a Bitcoin ATM and sending it to a wallet address the scammer controls. Because crypto transactions are effectively irreversible, there is no bank to call to reverse it afterward. Some states now require operators to reimburse fraud victims in certain cases, but recovery is the exception, not the rule.

This is also why the age skew matters: the machine feels familiar — it looks like an ATM — while the payment rail behind it behaves nothing like one. If someone you know is being pressured to use a crypto kiosk urgently, treat that urgency itself as the red flag. No legitimate government agency, tech-support team, or bank collects payment through a Bitcoin ATM. Ever. Our guide to buying Bitcoin safely after the $6.3B Binance hack lays out ten checks that apply just as well here, and our ranking of where crypto is actually safe after the Binance hack covers custody options once you own coins.

5 Myths About Bitcoin ATMs That Cost People Money

Most of the damage comes from beliefs that sound reasonable and are wrong. Here are the five that matter most:

• Myth: the fee shown on screen is the full cost. The spread — the gap between the machine's Bitcoin price and the market price — is usually the bigger charge, and Minnesota's case alleges it was barely disclosed at all. Always compare the Bitcoin you receive against the live market price.
• Myth: ATMs are anonymous, so they are private. Modern kiosks in the U.S. generally require identity verification, phone numbers, and sometimes ID scans, with daily limits as low as $500–$1,000 in several states. You pay the premium without gaining the privacy.
• Myth: cash makes it safer than an exchange. Cash eliminates chargeback protection rather than adding safety. A bank transfer to a regulated exchange can be traced and, in fraud cases, sometimes frozen; a cash deposit into a scammer's wallet cannot be undone.
• Myth: all machines charge about the same. Minnesota's data shows spreads from 10% to 43% at a single operator. Two machines on the same street can leave you with materially different amounts of Bitcoin.
• Myth: the biggest operator must be the safest. The biggest operator filed for bankruptcy and switched off 9,276 machines in a day, while facing fraud-facilitation lawsuits from multiple states. Size was no protection for its customers.

Bitcoin ATM vs. Exchange vs. Payment App: The Fee Verdict

If the goal is simply to own Bitcoin — not to convert physical cash at any cost — the comparison is not close:

Route	Typical cost on $500	Bitcoin received (approx.)	Reversible if scammed?
Bitcoin ATM (Minnesota average spread)	~$125	~$375	No
Bitcoin ATM (median industry fee)	~$80	~$420	No
Regulated exchange, bank transfer	~$1–$5	~$495–$499	Bank rails may help
Payment app (PayPal, Cash App)	~$8–$25 in spread	~$475–$492	Platform support may help

Payment apps are the middle ground many first-time buyers actually use. Our guide to buying crypto with PayPal compares fees across seven coins and five cheaper alternatives, and it remains a better deal than any kiosk. The one genuine advantage a kiosk retains is accepting physical cash with no bank account. For everyone with a bank account or a payment app, that advantage is not worth $80–$125 per $500.

7 Checks Before You Ever Use a Bitcoin ATM

If you still need a kiosk — cash-only income, no bank account, no other option — run this checklist first. Skip the machine if it fails any of the first three.

1. Check the real price before you insert cash. Look up Bitcoin's live market price on your phone, then ask the machine how much Bitcoin your cash buys. Divide. If the gap exceeds 5%, walk away.
2. Check the operator, not just the machine. Search the operator's name plus "lawsuit," "ban," and your state. If it is in bankruptcy, under a cease-and-desist, or banned where you live, do not use it.
3. Check who told you to go there. If anyone — a caller, a texter, a pop-up, a "support agent" — directed you to the machine, stop. This is the signature move of kiosk fraud, and it accounts for a large share of the $389 million lost in 2025.
4. Check the wallet address character by character. Send only to an address you generated yourself in your own wallet. Never type or scan an address someone else gave you.
5. Check the daily limit and ID rules. Several states cap kiosk transactions at $500–$1,000 per day, and machines may demand ID and a phone number. Know the rules before you travel to one.
6. Check the receipt and keep it. Photograph the machine ID, the transaction ID, the rate quoted, and the amount of Bitcoin sent. If something goes wrong, this is your only evidence.
7. Check what happens after the purchase. Move the Bitcoin to a wallet you control as soon as it arrives. Leaving it in a custodial wallet tied to the kiosk operator adds a second counterparty risk on top of the fee.

For the wallet step, start with our explainer on what a crypto wallet actually is.

What Happens Next for Bitcoin ATMs

Three forces will decide whether kiosks survive as a niche or fade further. First, the Bitcoin Depot bankruptcy wind-down: asset sales could relaunch machines under new owners in permissive states, but the $1.15 billion Minnesota claim and the fraud lawsuits will hang over whatever remains. Second, state law: with Indiana banning kiosks outright, Tennessee criminalizing their operation, Minnesota's ban taking effect in 2026, and other states imposing caps and reimbursement duties, the compliant operating map is shrinking. Third, the fee floor: as long as exchanges and payment apps charge 1% or less, a machine charging 10–25% needs a customer who cannot use those alternatives — a shrinking, vulnerable pool.

The most likely outcome is a smaller, more regulated kiosk sector: fewer machines, lower daily limits, clearer fee disclosure, and continued fraud enforcement. That would improve on the 2025 record, but it would not make kiosks a good deal. Disclosure of a 20% fee does not make it cheap; it just makes it honest. Until kiosk pricing competes with the 1% world, treat the machine on the corner as a last resort, not a first stop.

Sources for the numbers in this article include Bitcoin ATM News on the $1.15 billion claim, BitRss on the industry's fraud, bans and fees, PaySpace Magazine on Bitcoin Depot's collapse, CoinCentral on the bankruptcy filing, and the KuCoin daily market report for November 3, 2026.

Frequently Asked Questions

How much does a Bitcoin ATM actually charge?

FinCEN puts typical kiosk fees at 7% to 20%. Minnesota's analysis of Bitcoin Depot transactions found spreads averaging 25% and ranging from 10% to 43%. Always compare the Bitcoin you receive with the live market price — the spread is often larger than any displayed fee.

Is it safe to use a Bitcoin ATM in 2026?

Physically, usually; financially, it is the riskiest common way to buy crypto. The FBI recorded $389 million in reported kiosk-related fraud losses in 2025, up 58% year over year. Never use a kiosk at someone else's direction, and never send to an address you did not generate yourself.

Why did Bitcoin Depot shut down?

Bitcoin Depot filed for Chapter 11 on May 17–18, 2026, after first-quarter revenue fell 49.2% and gross profit fell 85.5%. Its CEO blamed state regulations, transaction limits, and bans; the company also faced more than $20 million in legal judgments and fraud-facilitation lawsuits from several states. Its 9,276 kiosks went offline the same day.

Can I get money back if I was scammed at a Bitcoin ATM?

Usually not — crypto transfers are effectively irreversible. Report it immediately to the FBI's Internet Crime Complaint Center, your local police, and the kiosk operator, and keep the receipt and transaction ID. Some states require operator reimbursement in certain cases, but recovery is the exception.

Are Bitcoin ATMs banned anywhere in the US?

Yes. Indiana has a statewide prohibition, Tennessee criminalized operating virtual-currency kiosks, Minnesota approved a ban taking effect in 2026, and California caps transactions at $1,000 per person per day. Rules vary sharply by state, so check your state's position before using one.

What is the cheapest way to buy Bitcoin instead?

A regulated exchange funded by bank transfer typically costs around 0.1–1% in trading fees — roughly $1–$5 on a $500 purchase, versus $80–$125 at a kiosk. Payment apps cost more than exchanges but still far less than kiosks. Move your coins to a wallet you control afterward.

Conclusion: The Machine Is Not Your Friend

Bitcoin ATMs sell convenience at a price no other route charges: a hidden spread that averaged 25% at the country's largest operator in Minnesota, a fraud record of $389 million in a single year, and a business model that collapsed under its own costs and lawsuits. For most buyers in November 2026, the verdict is clear: skip the kiosk, buy through a regulated exchange or payment app, verify the price before you pay, and keep your coins in a wallet you control. The $125 you save on a $500 purchase is the best return the crypto market will offer you this week — and unlike a price prediction, it is guaranteed.