Tennessee’s ban on cryptocurrency ATMs will remain in full effect after a federal district court rejected an emergency attempt by industry leaders to block the law, Attorney General Jonathan Skrmetti announced today.

The ruling comes after GPD Holdings, LLC (operating as CoinFlip) and Charles Wernicke (operating as Private IT Corporation) filed a lawsuit seeking a temporary restraining order against Public Chapter 766 ahead of its July 1 effective date. The United States District Court denied the request, ruling that the plaintiffs failed to meet the legal standards required for emergency injunctive relief.

Under Public Chapter 766, it is now a Class A misdemeanor to knowingly install, permit, place, or operate a virtual currency kiosk anywhere in the state of Tennessee. State lawmakers passed the legislation following extensive testimony highlighting how crypto ATMs are frequently leveraged by fraudsters to scam victims out of millions of dollars nationwide.

While the court acknowledged that crypto ATM operators would experience economic harm under the ban, it determined that those losses were heavily outweighed by the public interest in upholding state law and protecting consumers.

“Cryptocurrency ATMs are tools for scammers targeting vulnerable Tennesseans and are rarely used for anything approaching a legitimate purpose,” said Attorney General Jonathan Skrmetti. “The General Assembly recognized that these machines benefit fraudsters at the expense of everyday citizens… If you see evidence that an elderly relative or friend is trying to make an unusual cryptocurrency transaction, work with them to make sure they’re not being ripped off.”

The court further concluded that the plaintiffs failed to show a likelihood of success on the merits of their constitutional claims, ruling that the alleged burdens on interstate commerce do not outweigh Tennessee’s legitimate interest in combating fraud.

The lawsuit was defended by the Office of the Attorney General on behalf of the State and the Tennessee Department of Financial Institutions. While the underlying constitutional lawsuit will continue to move through the legal system, the court’s order ensures the ban remains actively enforced while litigation proceeds.

Tennessee residents who believe they or someone they know has fallen victim to a scam can file an official complaint with the state at tn.gov/consumer.