ATLANTA — Bitcoin Depot said it has filed for voluntary Chapter 11 bankruptcy protection as the cryptocurrency ATM operator seeks to wind down operations and sell its assets amid mounting regulatory and legal pressures on the industry.
In a statement, Bitcoin Depot said it filed for protection in the U.S. Bankruptcy Court for the Southern District of Texas and has begun a court-supervised process intended to facilitate an “orderly wind-down” of the company’s business.
The company said its network of Bitcoin ATMs has already been taken offline.
CEO Alex Holmes said in the statement that Bitcoin Depot had implemented a series of fraud-prevention measures over time, including enhanced identity verification procedures, fraud warnings for customers and lower transaction limits.
However, Holmes said the regulatory environment for Bitcoin ATM operators has become increasingly difficult.
Restrictions & Litigation
“States have imposed increasingly stringent compliance obligations, including new transaction limits, and in some jurisdictions, outright restrictions or bans on BTM operations,” Holmes said in the statement. He added that operators also have faced growing litigation and regulatory enforcement actions.
“These developments have materially affected Bitcoin Depot’s business and financial position,” Holmes said. “Under these circumstances, the Company’s current business model is unsustainable.”
Holmes said the company determined that a bankruptcy filing and court-supervised restructuring represented the best option after evaluating alternatives.
Canadian Entities Affected
Bitcoin Depot said its Canadian entities are included in the U.S. bankruptcy proceedings and that it expects to initiate restructuring proceedings in Canada. The company said its other international operations will wind down under applicable foreign laws.
The company also said it filed several customary “first day” motions with the bankruptcy court as part of the Chapter 11 process.
Bitcoin Depot, which was founded in 2016, had grown into one of the larger operators of cryptocurrency ATMs in the United States prior to the filing, according to the company.
