Connecticut Orders Bitcoin Depot to Shut Down Kiosks Over Fee Violations and Refund Failures

Highlights:

• Bitcoin Depot to shut down operations in Connecticut after regulators found overcharging and refund failures.
• Multiple states are taking action as authorities review how crypto ATMs handle fraud and user protection.
• The company expects up to a 40% revenue drop as stricter rules reduce transaction activity.

Connecticut regulators ordered Bitcoin Depot to stop operating its kiosks after finding excessive fees and weak consumer protections. The state issued a temporary cease-and-desist order through its Consumer Credit Division. The order also suspended the company’s money transmission license because it failed to meet legal requirements. This action means Bitcoin Depot cannot run its kiosk services anywhere in Connecticut.

Connecticut shuts down Bitcoin Depot operations as company braces for lower 2026 revenue outlook

• BTM operator faces mounting regulatory headwinds across states
• Declining revenue signals broader crypto ATM industry struggles

🏛️ $BTC

— unhedged (@unhedgedx) March 18, 2026

State officials found that the company charged fees above the 15% legal limit in more than 1,000 transactions. These charges led to about $150,000 in extra costs paid by over 500 Bitcoin ATM users. Regulators also said some people who lost money to scams did not receive full refunds.

Officials also cited lapses in disclosures and day-to-day activities within the kiosk network. They claimed that these gaps complicated the understanding of costs and risks by users. Due to this, regulators acted swiftly and claimed that public safety demanded urgent action. The order also opens the penalty door to fines, restitution, and other monetary remedies.

Regulators warned that the company could lose its license permanently if issues remain unresolved. A money transmission license allows companies to run payment services within a state. Without it, Bitcoin Depot cannot offer its core services through kiosks.

Financial Pressure Builds as Regulation Weighs on Revenue and Investor Confidence

Bitcoin Depot reported revenue of $615 million last year, which represented a slight increase over the prior year. The profit, however, diminished as net income decreased to $5.1 million compared to $7.8 million. This decline indicates that the increased cost is already beginning to have an impact on the business.

The fourth quarter experienced a more pronounced slowdown. The revenue decreased to $116 million compared to $136.8 million a year ago. The company attributed this reduction to new state regulations and increased compliance requirements. The changes reduced the size of transactions and minimized the activity of its users in its kiosks. The company now expects further pressure in the coming year. It said core revenue could fall by 30% to 40% in 2026 because of ongoing regulatory changes.

The company has also made internal adjustments by reducing staff to manage costs as activity slowed. In addition, it disclosed weaknesses in internal controls in a recent SEC filing. The company said these issues did not affect earlier financial results. Even so, the disclosure raised questions about oversight.

Bitcoin Depot to Shut Down as State Scrutiny Expands Across Its ATM Network

Bitcoin Depot is under increasing scrutiny in various states as regulators examine its kiosk business. Massachusetts initiated a lawsuit that implicates the firm in scam-related crypto activities. According to authorities, the case centers on the way transactions exposed users to fraud.

Fraud exposure triggers crackdown → Crypto ATM industry at inflection point → $330M losses

Massachusetts alleges Bitcoin Depot enabled scam-linked transactions
as fraud complaints tied to crypto ATMs surged nationwide.
FBI reports show 99% YoY growth in fraud cases,
with… pic.twitter.com/N2VbP7xoi6

— ἄγγελος | Signal Feed (@Angel_News_Log) February 26, 2026

The Iowa authorities also intervened and charged the company with not safeguarding users against losses in scams. Regulators claimed that there should have been stronger protection measures to avoid such cases. The company settled claims associated with consumer losses by paying $1.9 million in Maine. The company is also obliged by the contract to adhere to licensing regulations and enhance its compliance policies.