Bitcoin Depot Flags Control ‘Weaknesses’ as Connecticut Halts Its Operations

Bitcoin Depot, the world’s largest Bitcoin ATM operator, has had its money-transmission licence summarily suspended by Connecticut regulators over alleged violations tied to kiosk fees, disclosures, and fraud-related refunds.

State regulators said Bitcoin Depot charged some kiosk users fees above the state’s 15% cap, failed to give some fraud victims full refunds, and did not meet certain disclosure and compliance requirements.

As such, the order requires the company to immediately cease operations in the state and disable its kiosks.

In a separate SEC late-filing notice, Bitcoin Depot said that it expects to report unremediated “material weaknesses” in its internal controls when it files its annual report.

The company said those issues did not lead to material errors or omissions in its earlier financial statements and are not expected to change the numbers.

Founded in 2016, Bitcoin Depot grew into the largest Bitcoin ATM operator in North America and became the first U.S. Bitcoin ATM operator to go public in 2023.

Bitcoin Depot shares were trading at about $4 on Tuesday, per Google Finance data, but the stock had already been on a steady slide before the suspension order. Over the past month, it is about 39% and is off about 55% year to date.

Connecticut regulators said they grounded the decision on “public safety and welfare,” which “imperatively require emergency action.” The state’s order seeks restitution, disgorgement, civil penalties, and points to a possible revocation or nonrenewal of Bitcoin Depot’s license.

A money transmission license gives Bitcoin Depot legal authority to operate its money transfer business in a state. Without it, the company cannot lawfully run that part of its kiosk business there.

Connecticut found more than 1,000 transactions in the state where Bitcoin Depot charged fees above the legal limit. Regulators said those transactions led to about $150,000 in excess fees paid by more than 500 consumers.

The state also said Bitcoin Depot failed to fully refund some people who were scammed into sending money through its machines. Regulators further alleged the company fell short on required disclosures and other compliance controls tied to how the kiosks were operated.

Connecticut’s move comes as Bitcoin Depot reported stronger results for the full year, with revenue rising to about $615 million in 2025 from roughly $575 million a year earlier.

But the latest quarter posed difficulties for Bitcoin Depot. Revenue fell to about $116 million from roughly $137 million a year earlier. The company posted a net loss of about $25 million.

The decline was “primarily driven by recently enacted state regulations that introduced transaction size caps and, to a lesser extent, enhancements to our compliance standards that modestly affected near-term transaction activity,” Bitcoin Depot CEO Scott Buchanan said in a statement.

Despite these hurdles, Buchanan maintained that the company sees these as “constructive for the long-term health, credibility, and sustainability” of the industry.

‘Structural blow’

The suspension places a “severe structural blow” on Bitcoin Depot and exceeds just being “a mere administrative warning,” Ryan Yoon, senior analyst at Tiger Research, told Decrypt.

Connecticut’s order points to serious failures in Bitcoin Depot’s compliance systems, including widespread fee overcharges and major gaps in customer identification records, Yoon explained, 

“For a publicly traded market leader to suffer forced operational halts and disgorgement indicates that its historical high-margin model fundamentally fails under strict regulatory scrutiny,” he said.

While serious, the compliance flag may be “far from catastrophic,” Dominick John, analyst at Zeus Research, told Decrypt.

That situation points to “ operational and reputational hiccups” that would need remediation, John noted.

More broadly, the suspension raises the bar across the sector and “signals that ATM regulatory issues aren’t going away,” with states expected to keep a close eye, pushing other operators to “face similar scrutiny if they don’t tighten compliance,” he explained.

Bitcoin Depot did not immediately respond to a request for comment.