Key Takeaways
- • Indiana lawmakers voted 7-0 in bipartisan fashion to advance legislation banning cryptocurrency ATMs entirely, shifting from a previous regulatory licensing approach that operators claimed would force them out of business.
- • Operating a crypto ATM would become an illegal deceptive act under the updated House Bill 1116, with penalties including state forfeiture of the kiosks, collected user funds, and full investigation costs borne by violators.
- • Crypto ATM scams have cost Indiana residents $330 million compared to $6 million lost at traditional bank ATMs, despite crypto ATMs representing only one-tenth the number of traditional machines in circulation.
- • The committee simultaneously weakened House Bill 1042 by removing a provision that would have permitted Indiana's public pension funds to invest in Bitcoin and cryptocurrency ETFs, signaling legislative skepticism toward crypto assets despite bipartisan support for the ATM ban.
- • Senator Scott Baldwin (R-Noblesville), who chairs the Senate's financial institutions panel, characterized crypto ATMs as "havens for money laundering and tax evasion" with "no legitimate reasons" for operation in the state.
Summary
Indiana lawmakers on February 11, 2026, advanced legislation to ban cryptocurrency ATMs outright, moving decisively beyond a previous regulatory framework that would have required operator licensing and customer identity verification. The House Bill 1116 amendment passed with bipartisan support in a 7-0 committee vote, reflecting broad consensus that the machines pose systemic fraud risks to consumers and the state.
Under the strengthened language, operating a crypto ATM would constitute an illegal deceptive act enforceable by Indiana's attorney general. Courts would gain authority to order violators to forfeit the physical kiosks to the state, surrender all funds collected from users, and reimburse the state for all investigation and enforcement costs. This represents a complete prohibition rather than the earlier approach of licensing and transaction limits that industry operators had objected to during prior committee testimony.
The decision reflects stark fraud disparities highlighted in committee discussions. According to testimony presented, crypto ATM scams have generated $330 million in losses across Indiana, contrasted against $6 million in losses at traditional bank ATMs—a 55-fold difference despite crypto ATMs representing only one-tenth the number of machines as conventional banking infrastructure. Senator Scott Baldwin, R-Noblesville and chair of the Senate's financial institutions committee, stated that crypto ATMs function as "havens for money laundering and tax evasion," with no legitimate operational justification in the state.
The legislative movement on crypto ATMs stands in stark contrast to a simultaneous retreat on pension investment provisions. The committee also stripped a key amendment from House Bill 1042 that would have authorized Indiana's public pension funds to invest in Bitcoin and cryptocurrency ETFs. This weakening suggests lawmakers view crypto assets through fundamentally different lenses depending on context—rejecting consumer-facing kiosks while remaining hesitant about institutional pension allocations, even as federal regulatory frameworks continue evolving.
The legislation could take effect as soon as late February 2026 if enacted, positioning Indiana among states taking aggressive enforcement stances against decentralized asset infrastructure despite growing institutional adoption of digital assets elsewhere.
Under the strengthened language, operating a crypto ATM would constitute an illegal deceptive act enforceable by Indiana's attorney general. Courts would gain authority to order violators to forfeit the physical kiosks to the state, surrender all funds collected from users, and reimburse the state for all investigation and enforcement costs. This represents a complete prohibition rather than the earlier approach of licensing and transaction limits that industry operators had objected to during prior committee testimony.
The decision reflects stark fraud disparities highlighted in committee discussions. According to testimony presented, crypto ATM scams have generated $330 million in losses across Indiana, contrasted against $6 million in losses at traditional bank ATMs—a 55-fold difference despite crypto ATMs representing only one-tenth the number of machines as conventional banking infrastructure. Senator Scott Baldwin, R-Noblesville and chair of the Senate's financial institutions committee, stated that crypto ATMs function as "havens for money laundering and tax evasion," with no legitimate operational justification in the state.
The legislative movement on crypto ATMs stands in stark contrast to a simultaneous retreat on pension investment provisions. The committee also stripped a key amendment from House Bill 1042 that would have authorized Indiana's public pension funds to invest in Bitcoin and cryptocurrency ETFs. This weakening suggests lawmakers view crypto assets through fundamentally different lenses depending on context—rejecting consumer-facing kiosks while remaining hesitant about institutional pension allocations, even as federal regulatory frameworks continue evolving.
The legislation could take effect as soon as late February 2026 if enacted, positioning Indiana among states taking aggressive enforcement stances against decentralized asset infrastructure despite growing institutional adoption of digital assets elsewhere.
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