One of the largest bitcoin ATM operators filed Monday for Chapter 11 bankruptcy in the Southern District of Texas, but company executives say they plan to use the bankruptcy process for “an orderly wind-down of operations and a sale of the company’s assets” because the company’s “current business model is unsustainable.”
Atlanta-based Bitcoin Depot, which launched in 2016 and became one of the largest crypto ATM operators in the U.S., has hired Vinson & Elkins as its lead legal advisor with Texas partners Paul Heath and Sara Zoglman and New York partners David Meyer and Jessica Peet leading the way.
Bitcoin Depot has named Portage Point Partners as its restructuring advisor. The case has been assigned to U.S. District Judge Christopher Lopez in Houston.
In its bankruptcy filing, Bitcoin Depot states that it and its 15 affiliated businesses have one to 49 creditors owed between $10 million and $50 million. The company operates more than 9,000 ATMs that convert cash into crypto in the U.S. and Canada. The only Texas company listed as a creditor is Houston-based armored transport operation called Loomis, which is owed $223,231.41.
In a statement, Bitcoin Depot CEO Alex Holmes said that the “regulatory environment for BTM operators has shifted significantly.”
“States have imposed increasingly stringent compliance obligations, including new transaction limits, and in some jurisdictions, outright restrictions or bans on BTM operations; and operators have faced increasing litigation and regulatory enforcement,” Holmes stated. “These developments have materially affected Bitcoin Depot’s business and financial position. Under these circumstances, the Company’s current business model is unsustainable. After evaluating all options, we determined to initiate this court-supervised process to facilitate an orderly wind-down of operations and a sale of the Company’s assets. We are grateful to our customers, suppliers, and business partners for their support. I also want to thank our employees across the globe for their continued hard work and dedication.”
The case is In Re Bitcoin Depot, SDTX, Case No. 26-90529.