Bitcoin Depot Inc. operated the largest network of Bitcoin ATMs in North America. As of the petition date, not one of its roughly 9,700 kiosks was running. The company and 17 affiliated entities filed voluntary chapter 11 petitions in the United States Bankruptcy Court for the Southern District of Texas, Houston Division, on May 17, 2026. A first-day declaration from the company's chief restructuring officer, filed the following day, sets out a plan to wind down operations and sell substantially all of the assets rather than reorganize and continue as a going concern.

The declaration ties the filing to one operational decision and its aftermath. In October 2025 the company began requiring identity verification on every transaction. A revenue decline of nearly half year over year followed, alongside mounting litigation exposure and a going concern warning filed days before the petition.

The business was concentrated in a single product line. The company owned and operated a network of Bitcoin ATMs, referred to in the filing as kiosks, that let customers buy Bitcoin with cash through one-way, cash-to-Bitcoin transactions. As of December 31, 2025, that network spanned approximately 9,700 owned and leased kiosks across 48 U.S. states, 10 Canadian provinces, and 6 Australian states, placed in convenience stores, gas stations, pharmacies, grocery chains, and shopping malls in zip codes containing roughly 69 percent of the U.S. population. The kiosks generated $613.6 million in revenue for the year ended December 31, 2025, which the declaration puts at approximately 99.8 percent of total company revenue.

The model carried little inventory risk. The company held a relatively small Bitcoin balance at any given time, typically between $1.0 million and $2.0 million, and purchased Bitcoin on a just-in-time basis to fill customer orders. To secure placement in high-traffic retail locations, it was party to approximately 7,700 floorspace agreements. A second program, BDCheckout, let customers buy Bitcoin at retail checkout counters through a transaction started on the company's mobile application, and it was available at approximately 16,300 retail locations at year-end 2025 with a historical average markup of 15 percent.

The corporate group consists of 24 entities, with Bitcoin Depot Inc. as the publicly owned ultimate parent. The company traces to a limited liability company formed by its founder on June 7, 2016, which acquired a controlling interest in a Canadian kiosk software business in July 2021. Bitcoin Depot Inc. itself was formed on June 30, 2023, when a de-SPAC transaction with a Delaware special purpose acquisition corporation closed. The founder remains the controlling shareholder. Seventeen of the company's 23 subsidiaries are debtors in these cases, for 18 debtor entities in total. The remaining subsidiaries sit outside the U.S. filing: a non-debtor Australian entity that owns approximately 140 kiosks is winding down through an Australian insolvency proceeding, and the Canadian subsidiaries intend to commence recognition proceedings in Canada.

The declaration describes pressure that built from three directions and then converged. Beginning in approximately 2024, the company faced lawsuits and investigations from 11 state agencies alleging that its platforms were used by third parties to perpetrate fraud. It also became subject to a voluntary information request from the Securities and Exchange Commission and an investigation by the Federal Trade Commission. Separately, a subsidiary, BitAccess, Inc., was subject to an arbitration award of approximately $18.5 million.

In October 2025, the company implemented Know Your Customer verification requiring identification for every transaction. Two effects followed. User bans associated with the enhanced compliance measures accounted for approximately 4 percent of monthly transaction volumes, and reported revenue declined sharply. The swing in operating results across consecutive quarters shows the speed of the change.

The losses arrived as liabilities grew. The company accrued more than $20 million in legal judgments during the fourth quarter of 2025. On May 11, 2026, it missed the filing deadline for its quarterly report, and on May 12, 2026, it filed a notification with securities regulators disclosing its inability to file the report on time and substantial doubt about its ability to continue as a going concern.

The same period brought repeated turnover in senior leadership. A leadership transition announced in November 2025 took effect on January 1, 2026, installing a new chief executive officer and chief operating officer as the founder stepped down from the chief executive role. In February 2026, the chief legal officer and chief compliance officer resigned, citing compliance concerns. In March 2026, the recently installed chief executive officer and chief operating officer resigned, the founder stepped down as executive chairman while remaining a board member, and an independent director who had joined the board in August 2025 was appointed chief executive officer and chairman. A chief restructuring officer was appointed and a restructuring committee formed on May 14, 2026, three days before the filing.

Sequence of Events

The declaration states that the debtors intend to conduct an orderly wind-down and sale of substantially all of their assets through the chapter 11 process and to establish a liquidation trust for the benefit of their stakeholders, with the aim of monetizing the estate. This is a stated intention rather than an approved plan. No sale has been authorized, no liquidation trust has been established, and the relief described below remains subject to court approval and to objection deadlines that have not passed.

The debtors propose to fund the cases through the use of cash collateral, which the declaration describes as approximately $22.4 million held across the company's bank accounts. The wind-down extends across borders. The debtors seek authority for Bitcoin Depot Inc. to act as foreign representative in Canadian recognition proceedings, the Canadian subsidiaries intend to commence those proceedings, and the non-debtor Australian entity is pursuing a separate insolvency proceeding for its roughly 140 kiosks. The objective stated throughout is to preserve the value of the kiosk fleet, much of which sits idle or in storage, long enough to sell it.

Funded debt is modest relative to the size of the network. The declaration places total funded debt liabilities at approximately $15.77 million as of the petition date. A secured term loan facility provided by the prepetition lender accounts for the large majority of that figure, with the balance in equipment financing.

The term loan facility had been substantially paid down before the filing. It was established at an initial principal amount of $36,450,000 and stood at roughly $13,338,000 at the petition date, with an additional $3,100,000 exit fee and approximately $198,784 in accrued interest.

The workforce was small for a network of this scale. As of the petition date, the company employed approximately 116 people, with roughly 107 at its U.S. operating subsidiary, 7 at its Canadian subsidiary, and 2 at the recently acquired betting platform, supplemented by 13 independent contractors. Approximately 103 employees received a salary and approximately 13 were paid hourly. The company issued termination notices to all U.S.-based employees with a 60-day notice period under the Worker Adjustment and Retraining Notification Act, and the declaration takes the position that any resulting WARN claims would be entitled to administrative priority if termination occurs before the notice period expires.

The declaration notes that no prepetition amount owed to any individual on account of wages exceeds the $17,150 priority cap under section 507(a)(4) of the Bankruptcy Code.

The debtors operate a centralized cash management system of 21 bank accounts at 9 banks, carrying average monthly bank fees of approximately $179,000. They seek to keep the existing accounts open rather than close them and open new debtor-in-possession accounts, and to continue intercompany transfers with administrative expense priority. Because the business is winding down rather than continuing, the debtors also intend to close their seven cryptocurrency wallets and convert the holdings to cash, and they seek a deposit account dedicated to cash collateral and another dedicated to taxes.

Cash is concentrated in a handful of accounts, including a main operating account holding approximately $11.7 million and a treasury account holding approximately $6.9 million. Together with the smaller balances, these accounts make up the roughly $22.4 million of cash collateral the debtors propose to use to fund the cases.

Through the first-day motions, the debtors seek the customary slate of relief to support an orderly transition into chapter 11. On the administrative side, they request joint administration of all 18 cases under the lead case, authority to file a consolidated creditor matrix and a consolidated list of the top 30 unsecured creditors, employment of a claims and noticing agent, a 30-day extension to file their schedules and statements through June 30, 2026, and authority for the parent to serve as foreign representative in Canada.

On the operational side, the debtors seek authority to pay prepetition wages and benefits of approximately $849,000 and to continue compensation programs in the ordinary course; to maintain the cash management system, pay prepetition bank fees of approximately $179,000, and close the cryptocurrency wallets; and to pay approximately $2.36 million in accrued prepetition taxes and fees. The accrued taxes include approximately $1.4 million in franchise and income taxes, approximately $596,000 in sales and use taxes, and approximately $364,000 in property taxes, and the declaration notes an ongoing Texas Comptroller franchise tax audit covering tax years 2022 through 2025.

The debtors further seek to provide adequate assurance to utility providers through a $1,550 deposit and to pay critical vendors, lien claimants, and foreign vendors up to $448,000 on an interim basis and up to $888,000 on a final basis, subject to customary trade terms and claw-back provisions. The declaration explains that the debtors depend on a limited group of vendors to maintain and store the kiosk fleet, including approximately 438 kiosks currently held with third-party warehousers, to preserve value through the sale process. Finally, the debtors seek authority to retain and pay ordinary course professionals subject to tiered monthly fee caps of $50,000, $25,000, and $8,500.