Bitcoin Depot Seeks Chapter 11 Protection; Shares Plunge About 80%

Bitcoin Depot, a U.S.-listed operator of Bitcoin ATMs, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas, CoinDesk reported. The Atlanta-based company said it plans to wind down all operations and pursue a sale of its assets. Following the announcement, the stock fell from roughly $3 to about $0.75 in a single session, a drop of around 80%. Bitcoin Depot has also removed all of its Bitcoin ATMs. Company data disclosed as of August 2025 showed more than 9,000 terminals worldwide, spanning 47 U.S. states, and offering retail cash-to-bitcoin purchase services in 31 states. All terminals have now been shut down. CEO Alex Holmes said the firm's business model is no longer sustainable, citing a significantly tighter regulatory backdrop. Several states have increased compliance requirements, including new transaction limits, while some jurisdictions have restricted or banned Bitcoin ATM operations. In March, Indiana became the first state to ban Bitcoin ATM terminals, followed by similar actions in Tennessee and Minnesota. Over the same period, Connecticut suspended Bitcoin Depot's operating license. Fraud complaints tied to crypto ATMs have continued to climb as oversight tightens. FBI data shows 13,460 crypto-ATM-related fraud complaints in 2025, with reported losses of $389 million—up 58% from the prior year. The trend has weighed on operators that rely on offline terminals to acquire customers, while widening state-level restrictions have pushed up compliance costs and operating risk. Before the bankruptcy filing, Bitcoin Depot disclosed financial reporting and internal control issues. On May 12, it filed a late notice with the U.S. Securities and Exchange Commission, saying it could not submit its Q1 2026 Form 10-Q on time due to significant deficiencies in its cash reconciliation process. The filing also included a warning that there is substantial doubt about the company's ability to continue as a going concern. Preliminary results showed revenue for the quarter ended March 31, 2026, of about $83.5 million, down $80.7 million, or 49.2%, from a year earlier. Gross profit fell to $4.5 million from $31.2 million, and net income swung to a $9.5 million loss from a $12.2 million profit. Cash declined to $44 million from $65.6 million, while operating expenses rose 32.3% year over year. The company said it accrued more than $20 million in legal fees in the fourth quarter of 2025. Legal pressure has also intensified. In February 2026, Massachusetts Attorney General Andrea Campbell sued Bitcoin Depot, alleging it enabled consumer-focused cryptocurrency scams. The Iowa Attorney General raised similar allegations, claiming the company's pricing was misleading and that it failed to stop transactions known to be fraudulent. In its May 12 late-filing notice, Bitcoin Depot additionally disclosed a material weakness in internal controls related to cash-in-transit reconciliation and, for the first time, issued a substantial-doubt warning about its ability to continue as a going concern.