Indiana Bitcoin ATM Regulations
Indiana became the first U.S. state to pass a complete ban on Bitcoin ATMs. HEA 1116 classifies operating a virtual currency kiosk as an "illegal deceptive act" under Indiana consumer protection law.
Overview
On February 27, 2026, Indiana Governor signed HB 1116 into law as HEA 1116, making Indiana the first state in the nation to completely ban Bitcoin ATM operations. The legislation had previously passed the Senate Financial Institutions Committee with a unanimous 7-0 vote.
The bill was originally introduced as a regulatory framework (similar to Iowa's SF 449 or Illinois's SB 2319) but was amended in committee to a total prohibition. Operating a virtual currency kiosk is now classified as an "illegal deceptive act" under Indiana's Deceptive Consumer Sales Act.
Enforcement
Enforcement Powers
The Indiana Attorney General has broad enforcement authority under HEA 1116:
- Can bring civil actions against operators under the Deceptive Consumer Sales Act
- Can seek injunctions to halt operations immediately
- Can impose civil penalties for violations
- Can order full restitution to consumers
- Operating a Bitcoin ATM constitutes an "illegal deceptive act" per se
Property Owner Liability
Property Owner Liability
HEA 1116 extends liability beyond operators to property owners and lessors who knowingly host Bitcoin ATMs after the ban takes effect.
Host Warning
Property owners who continue to host Bitcoin ATMs after the effective date may face legal action from the Attorney General. Existing hosting agreements should be reviewed with legal counsel.
Forfeiture Provisions
Kiosk Forfeiture
Under HEA 1116, Bitcoin ATM kiosks found operating in Indiana after the effective date are subject to seizure and forfeiture by the state. This includes the physical hardware and any funds contained within the machines.
Legislative Background
Legislative Background
The ban was driven by concerns over Bitcoin ATM-facilitated fraud. Senator Scott Baldwin (R-Noblesville), chair of the Financial Institutions Committee, cited money laundering and tax evasion as key motivations.
Key facts cited during committee hearings:
- $400,000 in scam losses in Evansville alone in 2025
- $240 million in U.S. Bitcoin ATM fraud losses in the first half of 2025 (FBI)
- 99% increase in FBI Bitcoin ATM fraud complaints from 2023 to 2024
- CoinFlip claimed 17,000 Indiana customers and $1.5 million in rent payments
The AARP endorsed the ban, and consumer protection advocates argued that Bitcoin ATMs disproportionately harm elderly victims.
HB 1116 → HEA 1116