Bitcoin Depot, a crypto ATM operator listed on Nasdaq, has sought Chapter 11 bankruptcy protection in Texas after facing escalating regulatory pressures and financial declines. The filing, made in the Southern District of Texas, allows the company to systematically close operations and liquidate assets under court oversight. The firm has already deactivated its global Bitcoin ATM network, and its Canadian subsidiaries will also cease operations.
CEO Alex Holmes stated that state regulators have enforced stricter compliance measures on crypto ATM operators, including transaction limits and operational restrictions in certain areas. He noted that increased litigation and enforcement actions have rendered the existing business model unworkable. The company had previously warned of a 30% to 40% revenue drop in 2026 due to shifting regulations.
Regulatory challenges have mounted over the past year. Connecticut suspended Bitcoin Depot’s money transmission license in March, issuing a cease-and-desist order over compliance failures and excessive fees. Massachusetts filed a lawsuit in February, accusing the company of overcharging customers and insufficient fraud protections. Additional enforcement actions were taken by Maine, Missouri, and Iowa.
Financial troubles worsened after a leadership change in March, when former CEO Scott Buchanan was replaced by Alex Holmes. In April, hackers breached the company’s IT systems and stole approximately $3.7 million from its crypto wallets. Just days before the bankruptcy filing, Bitcoin Depot delayed its first-quarter 2026 earnings report due to a material weakness in cash reconciliation. Preliminary unaudited results revealed a 49.2% year-over-year revenue decline for the quarter ending March 31, 2026, and a net loss of $9.5 million, compared to a $12.2 million profit in the same period last year.
Founded in 2016, Bitcoin Depot once operated over 9,000 crypto ATMs across North America, enabling users to exchange cash for Bitcoin. As of its last trading day, shares closed at $2.93, up 5.4%, but the stock has plummeted 29.6% over the past month and nearly 80% over six months.