Minnesota Files $1.15 Billion Claim in Bitcoin Depot Bankruptcy Over Hidden "Spread Fees"

Minnesota Attorney General Keith Ellison filed a proof of claim for $1,147,515,430 in Bitcoin Depot's Chapter 11 case on July 29, 2026, alleging that the company's only disclosure of a fee it charged on every kiosk purchase was, in the filing's words, "a paragraph buried in its dense 'Terms of Service,' which a consumer was not required to read in order to transact at a cryptocurrency ATM and was highly unlikely to read."

According to the attachment to the claim, each time a consumer bought Bitcoin at one of Bitcoin Depot's Minnesota kiosks, the company charged an undisclosed "Spread Fee" calculated as a percentage of the transaction — averaging 25% and ranging from 10% to 43% based on the Minnesota AG's own analysis. The state alleges Bitcoin Depot "did not clearly or conspicuously disclose the Spread Fee to consumers before, during, or after a cryptocurrency transaction," and "did not provide sufficient information for a consumer to identify or calculate the Spread Fee on their own before, during or after a cryptocurrency transaction."

That matters because the claim is not a lawsuit seeking a settlement from a solvent company — it is a creditor claim in a wind-down, and Minnesota is asserting it survives the bankruptcy entirely. The state argues its claim is nondischargeable under 11 U.S.C. §§ 523(a)(2)(A) and 1141(d)(6)(A) because the underlying violations "are the result and consequence of fraudulent and false representations."

How the $1.147 Billion Breaks Down

The claim attachment itemizes three components, each tied to a specific paragraph of the state's supporting narrative.

The penalty figure is arithmetic, not estimation. Under Minn. Stat. § 8.31 subd. 3, the Minnesota AG may recover a civil penalty of up to $25,000 per violation, and Minn. Stat. § 645.24 provides that where a penalty is set for violating a law, it "shall be construed to be for each such violation." The state treats each transaction as a separate failure to disclose: 45,411 transactions × $25,000 = $1,135,275,000. The claim is filed as fully unsecured, with no priority asserted under 11 U.S.C. § 507(a) and no administrative priority under § 503(b)(9).

The Transaction Record the State Assembled

The claim quantifies Bitcoin Depot's Minnesota footprint with specificity that suggests the AG obtained operator transaction data before the bankruptcy filing.

The claim period runs through May 2026 — the month Bitcoin Depot Inc. and related debtors filed voluntary Chapter 11 petitions on May 17, 2026, and the month the company disclosed in Exhibit 99.1 to its May 18, 2026 Form 8-K that its BTM network had been taken offline. Minnesota's data collection, in other words, ran right up to the shutdown.

The Statute Bitcoin Depot Is Alleged to Have Violated

Three Minnesota statutes anchor the claim. The first two are general-purpose consumer protection provisions: Minn. Stat. § 325F.69 subd. 1, which makes fraud, unfair or unconscionable practices, false pretenses, and deceptive practices in connection with the sale of merchandise enjoinable "whether or not any person has in fact been misled, deceived, or damaged thereby"; and Minn. Stat. § 325D.44 subd. 1, the deceptive trade practices statute, including its catch-all for "unfair or unconscionable acts or practices."

The third is crypto-kiosk-specific. Paragraph 14 of the attachment states that Bitcoin Depot's failure to disclose the Spread Fee "also violated Minn. Stat. section 53B.75, which mandated that cryptocurrency ATMs disclose all relevant terms and conditions generally associated with the purchase transaction in a clear, conspicuous, and easily readable manner before and after the transaction."

That is the operative point for operators watching state legislatures pass kiosk-specific disclosure statutes. Minnesota did not have to stretch a general fraud statute to reach fee display practices — it had a purpose-built disclosure mandate, and it is using that mandate to convert per-transaction disclosure failures into per-transaction penalties. Similar clear-and-conspicuous disclosure language now appears in kiosk statutes enacted in South Dakota, North Carolina, Alabama, and elsewhere.

Scam Allegations Sit Alongside — But Outside — the Money

The claim's fee arithmetic is what generates the dollar figure, but paragraphs 3 through 5 lay out a separate set of allegations about scam facilitation. The state alleges that "[t]he overwhelming majority of these transactions were instances of fraud in which Minnesotans were duped into sending thousands of dollars in Bitcoin to a cryptocurrency wallet owned by a third party as part of a scam."

Minnesota says Bitcoin Depot "knew or should have known" this based on three indicators it identifies in the filing: wallet-tracing analysis showing that the overwhelming majority of transactions at its Minnesota kiosks were scam-related; direct reports from "[h]undreds of Minnesota consumers" to Bitcoin Depot itself and to law enforcement; and consumer demographics — "most of Debtor's consumers were over the age of 50," a group the state describes as least likely to invest in cryptocurrency and more vulnerable to scams. The filing cites the FTC's September 2024 Data Spotlight, "Bitcoin ATMs: A payment portal for scammers," as support for the general proposition that crypto kiosks are commonly used by scammers.

These are allegations, not adjudicated findings. Notably, the state did not attach a dollar figure for scam losses to its claim total — the $1.147 billion rests entirely on the fee-disclosure theory, restitution of the fees collected, and investigative costs. The AG expressly "reserves the right to amend or supplement its proof of claim to include additional documentation and/or additional areas of violations."

What This Means for Minnesota Consumers

Minnesota's crypto ATM ban took effect this month, and Bitcoin Depot's network is already offline — so there is no kiosk to walk away from. The question for the roughly 6,500 Minnesotans identified in the claim is whether any money comes back.

What This Means for Operators

Three structural lessons sit in this filing, and none of them depend on Bitcoin Depot's bankruptcy.

Per-transaction penalty math is the real exposure. The state's claim is 96 times larger than the fees it says were actually collected. That ratio is not an aggressive settlement posture — it's Minn. Stat. § 645.24 applied literally. Any operator running tens of thousands of transactions in a state with a per-violation penalty statute and a kiosk disclosure mandate is carrying nine-figure theoretical liability on disclosure practices alone, independent of any scam allegation.

Terms of Service is not a disclosure venue. The single most quoted sentence in this filing is the one about the fee being buried in a document a consumer "was not required to read in order to transact." Operators relying on ToS acceptance flows, hyperlinked fee schedules, or website-only disclosures should assume a regulator will characterize that the same way. Minnesota also alleged a second, independent failure: that the machine gave consumers insufficient information to calculate the fee themselves. Displaying an exchange rate without disclosing the spread against a reference market price is squarely within that theory.

Bankruptcy may not be an exit from consumer-protection liability. Minnesota's paragraph 19 asserts nondischargeability under 11 U.S.C. §§ 523(a)(2)(A) and 1141(d)(6)(A) on the ground that the violations flow from fraudulent and false representations. If that position holds, a state consumer-protection judgment premised on fraud follows the debtor out of Chapter 11. Every operator weighing restructuring as a way to shed AG exposure should watch how the Southern District of Texas handles this claim.

Bitcoin Depot's regulatory history in Minnesota is worth noting for context: the Minnesota Department of Commerce issued an administrative fine of roughly $10,337 in June 2024 for operating without a money transmission license, after which the company obtained a Minnesota license. Fourteen months later, the same state filed a claim more than 100,000 times that size. Readers can review enforcement records across operators in the operators directory and Bitcoin Depot's full history on its operator page.

What to Watch

Two things will determine whether this claim is a billion-dollar number or a paper number. First, whether the debtors or the creditors' committee object to Claim 1888 — and on what grounds: the per-transaction penalty multiplier, the characterization of the spread as an undisclosed fee, or the nondischargeability assertion. Second, whether other state attorneys general who assembled comparable transaction datasets follow Minnesota into the Southern District of Texas claims register with the same arithmetic. Missouri, Iowa, and Massachusetts all have open matters involving Bitcoin Depot and all have per-violation penalty statutes.

If a bankruptcy court in Houston endorses the theory that each undisclosed-fee transaction is its own $25,000 violation, the disclosure screen on a crypto kiosk becomes the single highest-liability pixel in the business.