Bitcoin Depot's Minnesota Crypto ATM Ban Lawsuits Go Quiet — Preemption Question Remains Unanswered

Bitcoin Depot (NASDAQ: BTM) filed lawsuits against both St. Paul and Stillwater, Minnesota, to overturn their bans on cryptocurrency ATMs — but nearly four months later, neither case shows signs of active litigation. No court has ruled on whether Minnesota's state money transmission license preempts local crypto ATM bans, and no formal dismissals have been filed either. The legal question that made these cases nationally significant remains completely unresolved.

That matters because these lawsuits represented the first direct legal test of whether a state licensing framework can override a city council's decision to ban Bitcoin kiosks. With the litigation apparently stalled, cities across Minnesota — and potentially across the country — may view these ordinances as a template for banning crypto ATMs through a simple council vote. But the cases are dormant rather than decided, which means the precedent everyone was watching for doesn't exist.

What Bitcoin Depot Argued

The 11-page St. Paul complaint rested on a preemption theory: Bitcoin Depot holds a Minnesota money transmission license issued by the state Department of Commerce, and the company argued that license — not a patchwork of local ordinances — governs who can operate cryptocurrency kiosks in the state.

The argument had legal grounding. The Minnesota Legislature repealed and re-enacted the Minnesota Money Transmission Act in 2023, establishing that no person may engage in a virtual-currency business unless licensed by the Department of Commerce. In 2024, the Legislature added crypto-ATM-specific rules:

Bitcoin Depot's complaint cited Department of Commerce guidance stating that operators who qualify for and obtain a state license are "entitled to conduct business in Minnesota." The company noted it operates approximately 8,400 kiosks and ATMs nationwide, including 111 in Minnesota, and offers a cashier-based checkout service called "BDCheckout" at 589 partner retailers throughout the state. It sought a declaratory judgment and permanent injunction to overturn St. Paul's ban, and filed a parallel suit against Stillwater in September 2025 that was amended on December 26, 2025.

St. Paul had not yet filed a response as of the December 30, 2025 Pioneer Press report. Stillwater had filed a proposed order indicating it would respond within 10 days of the amended complaint. What happened after that, in either case, is not publicly visible.

The Bans That Prompted the Fight

St. Paul's City Council approved its ban through Ordinance 25-76, adopted November 19, 2025, effective 30 days later on December 19, 2025. The ordinance prohibits any person from "hosting, operating, or permitting a virtual currency kiosk" within city limits. Notably, this was enacted under the city's general code authority, not as a zoning ordinance — a legal distinction that matters for preemption analysis, because zoning-based restrictions are more vulnerable to state preemption challenges than general police-power regulations.

Prior to the vote, St. Paul Police had identified at least 32 crypto ATMs within city limits, mostly in convenience stores and small grocers. Municipal officials cited markup rates of 20% to 30% or more and argued the machines were primarily used by fraudsters targeting seniors and vulnerable populations.

The city's legal position was firm. Its statement concluded: "Because this matter is now in litigation, the City will not comment on the specific legal claims. The City believes it acted within its authority and will defend the ordinance in court."

Stillwater moved first, banning crypto ATMs in April 2025. Bitcoin Depot sued in September 2025 and amended its complaint in December. The framing from both cities — narrow consumer protection, not broad anti-crypto policy — was never tested in court.

Why the Litigation May Have Stalled

Bitcoin Depot has not issued a public statement explaining the status of its Minnesota litigation. But the company's circumstances have changed dramatically since December.

The Massachusetts Attorney General's consumer protection lawsuit — filed February 3, 2025, alleging that more than 80% of customers depositing $10,000 or more were scam victims, generating $10.6 million in scam-linked revenue — remains pending. The Iowa Attorney General filed a similar action on February 26, 2025. Missouri issued a civil investigative demand in January 2026. Connecticut suspended Bitcoin Depot's license entirely.

Then, on April 8, 2026, the company disclosed via SEC Form 8-K that a cybersecurity incident first discovered on March 23, 2026, had been determined material as of April 6, 2026. Reports indicate approximately $3.6 million in Bitcoin was stolen in the breach.

A company fighting on multiple fronts — attorney general lawsuits, a material data breach, license suspensions — may not be able to afford the legal resources for offensive litigation against two small Minnesota cities, regardless of the preemption principle at stake.

There may also be strategic logic: losing the preemption argument in court would create binding precedent that any city in Minnesota could use to justify a ban. Letting the cases go dormant leaves the legal question unresolved — which, from Bitcoin Depot's perspective, may be preferable to a bad ruling.

But we should be clear: we are inferring from the absence of public activity, not from confirmed dismissals. It remains possible these cases are stayed, in settlement discussions, or simply moving slowly through the court system.

The Statewide Fraud Context

The cities didn't act in a vacuum. The Minnesota Attorney General's office had opened a statewide investigation into cryptocurrency ATM scams, which generated at least 51 scam reports and $700,000 in reported losses. In December 2025, Attorney General Keith Ellison's office referenced approximately 230 licensed crypto ATMs operating statewide — meaning the 32 machines in St. Paul alone represented roughly 14% of the state's total.

Other cities were watching the litigation closely. Woodbury and Forest Lake had reportedly considered ordinances requiring registration of businesses that host crypto ATMs — a lighter regulatory approach than an outright ban, but one that still asserts local authority over kiosk placement. With Bitcoin Depot's lawsuits showing no signs of progress, those cities have less reason to hesitate.

A note on enforcement: our live listings data as of April 10, 2026, still shows one Bitcoin Depot kiosk listed in St. Paul, while zero appear in Stillwater. Whether the St. Paul listing reflects an operational machine or a stale listing is unclear.

The Unresolved Preemption Question

The most consequential aspect of these dormant cases is what hasn't happened: no Minnesota court has ruled on whether the state's money transmission licensing framework preempts local bans on crypto ATMs.

This question matters far beyond Minnesota. Cities and counties across the country have begun exploring whether they can regulate or ban crypto ATMs locally. Minnesota was simply the first state where the issue was being actively litigated, largely because the state's 2023 and 2024 legislative actions created a detailed enough regulatory framework for a preemption argument to have real substance.

Without a court ruling, the legal landscape remains ambiguous. Cities can point to St. Paul and Stillwater as models of bans that survived — but they survived because the challenger stopped pressing, not because a judge upheld them. That's a meaningful distinction. A future operator with deeper pockets and fewer concurrent crises could refile and potentially win.

State preemption regularly invalidates local bans in other regulated industries. But winning on preemption requires a plaintiff willing and able to litigate to conclusion — and Bitcoin Depot, under siege from multiple directions, does not appear to be that plaintiff right now.

What This Means for Minnesota Bitcoin ATM Users

What This Means for Operators

The Minnesota cases don't establish legal precedent — dormant litigation isn't a ruling. But they establish a practical reality that operators need to take seriously.

Municipal bans just got easier to attempt. Any municipality in a state with comprehensive crypto ATM licensing can now point to St. Paul and Stillwater as models, knowing the industry's most-resourced operator stopped fighting. That signal matters even without a judicial opinion backing it up. Expect more cities — in Minnesota and elsewhere — to follow suit.

The preemption argument is unproven, not dead. Another operator — or Bitcoin Depot under different circumstances — could refile or bring a new case. But the next operator to try will need deeper pockets, fewer concurrent legal problems, and a willingness to see it through to a ruling.

Compliance is the only long-term insurance. The cities' stated justification for banning crypto ATMs was consumer harm — high fees, scam facilitation, predatory placement in vulnerable communities. Operators who cannot demonstrate compliance with state consumer protection requirements are handing municipalities the ammunition they need. The industry's best defense against local prohibition is proving that state regulation actually works.

Machine removal matters. Operators who leave machines in banned jurisdictions — whether through inattention or defiance — risk not only local enforcement action but reputational damage that undercuts the industry's argument for self-governance under state licensing frameworks.

What to Watch

Three things will determine whether these dormant cases matter — or become footnotes.

First, docket activity: the cases may not be dead. A settlement, stipulated dismissal, or sudden resumption of briefing would change the picture entirely. We will continue monitoring both dockets and update this story when court records provide clarity.

Second, municipal spread: Woodbury and Forest Lake were already considering crypto ATM regulations. With Bitcoin Depot's lawsuits showing no progress, the calculus for other Minnesota cities — and cities in other states with comparable licensing frameworks — shifts toward action. Watch for a wave of local ordinances in 2026.

Third, legislative action: the broader play for the industry may be pushing state legislatures to add explicit preemption language to money transmission acts, rather than litigating city-by-city. Without that, the patchwork problem Bitcoin Depot warned about in its complaint is exactly what operators are getting — and Minnesota's example suggests cities are willing to fill the gap.

For now, the municipal bans stand, the lawsuits are silent, and the preemption question that made these cases nationally significant has no answer.

This article is based on court filings, the December 30, 2025 Pioneer Press report by Frederick Melo, city records, SEC filings, and live ATM listings data as of April 10, 2026. We have not located formal dismissal orders for either case, any Bitcoin Depot statement addressing the litigation status, or an earnings transcript or investor presentation discussing the Minnesota disputes. Bitcoin Depot's SEC filings contain forward-looking statements identified by words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "project," "seek," "should," "will," "would," or similar expressions. These statements are not guarantees of future events or financial results, and actual outcomes may differ materially. If you have information about the current status of these cases, please contact our newsroom.