Cryptoassets Regulatory Intelligence cryptoassets.gi
US-TN v13.3.0
content: ai_generated legal review: never_reviewed (informational) publication gate: 0 failing10 sources retrieved model claude-sonnet-5 · 2026-08-06

Tennessee, USA

US-TN schema crypto-v2.0.0 trajectory: not yet assessedin transitionoverlaps: FIM, Advennt

Last updated · 8 categories · 14 sourced findings · 17 sources in the cumulative register

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United States federal law that applies in Tennessee, USA is covered once, on the United States page. This page covers Tennessee, USA’s own layer: its own law, regulators and enforcement.

Jurisdiction lead brief

Latest update · 28 September 2026

Lead Signal

Tennessee has criminalised virtual-currency kiosk operation statewide, effective July 1, 2026, under Public Chapter 766, layering a targeted Class A misdemeanor prohibition atop a general licensing regime that has never covered virtual currency at all. The Tennessee Department of Financial Institutions' longstanding stated policy is that the Money Transmitter Licence and its surety bond do not extend to virtual-currency transmission, meaning general crypto exchange and custody activity in Tennessee sits entirely outside the state licensing perimeter regardless of the new kiosk-specific ban. The kiosk prohibition therefore does not close the general licensing gap; it removes one narrow, cash-facing channel from an otherwise unregulated landscape.

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Tennessee has no bespoke crypto-asset licensing statute. Virtual-currency exchange and custody businesses fall under the state's general Money Transmitter licensing regime administered via NMLS, per the seed disambiguation. Separately, in April 2026 Tennessee enacted a targeted prohibition on virtual-currency kiosks (crypto ATMs) statewide, and its Sports Wagering Council has separately asserted that crypto-linked prediction-market platforms are engaging in unlicensed gambling. This mix of a general licensing backstop, a hard-ban carve-out for kiosks, and contested enforcement against event-contract platforms produces a fragmented, actively-shifting licensing posture.

Standing sub-brief · as of 25 August 2026153 words · last cycle 2026-09-28

Crypto Licensing

Tennessee enacted Public Chapter 766, requiring the decommissioning of all virtual-currency kiosks statewide by July 1, 2026, with no exception for existing machines or licensed financial institutions; operating a kiosk after that date is a Class A misdemeanor. This is a product-level prohibition rather than a change to the state's licensing perimeter. Separately, and unchanged this cycle, the Tennessee Department of Financial Institutions' Virtual Currency Statement of Policy confirms that the Money Transmitter License and its required surety bond do not cover virtual-currency transmission, and that TDFI does not regulate virtual currency generally. No comprehensive crypto exchange or custody licensing regime exists in Tennessee; the kiosk ban is a targeted hardware-channel prohibition layered on top of that structural absence.

Periodic update · new data 2026-09-28

Crypto Licensing

Tennessee's crypto-licensing landscape is defined by a persistent gap rather than a positive framework. The Tennessee Department of Financial Institutions' stated policy is that the Money Transmitter Licence and its associated surety bond requirement do not cover the transmission of virtual currency, meaning general crypto exchange and custody activity in the state has no dedicated licensing pathway and sits outside the state licensing perimeter entirely. This is a longstanding position rather than a new development, and it is the baseline against which this cycle's material change must be read.

That material change is Public Chapter 766, which prohibits installing, allowing the installation of, or operating a virtual-currency kiosk in Tennessee, effective July 1, 2026, as a Class A misdemeanor. The prohibition is narrow and targeted: it addresses kiosks specifically -- the physical cash-to-crypto conversion machines associated with elder-fraud and romance-scam typologies -- rather than crypto exchange or custody activity generally. The practical effect is that Tennessee's crypto-licensing posture now has two distinct zones: a general exchange/custody gap where no licence exists to obtain because the activity falls outside the Money Transmission Modernization Act's scope, and a kiosk-specific zone where the activity is not merely unlicensed but affirmatively criminalised.

Whether the kiosk ban should be read as narrowing the general 'does not regulate virtual currency' policy, or as an entirely separate criminal-law carve-out layered on top of an unchanged licensing gap, was not fully resolved this cycle and remains an open interpretive question. The absence of any dedicated virtual-asset licence category continues to distinguish Tennessee from states that have adopted BitLicense-style or money-transmitter-inclusive frameworks for virtual-currency businesses.

Outlook

The kiosk ban takes effect July 1, 2026. Watch for TDFI guidance clarifying whether the general MTL exclusion for virtual currency remains unchanged following the kiosk-specific criminal prohibition, and whether any subsequent legislative session moves toward a licensing framework for general exchange and custody activity, or instead extends the prohibition model already applied to kiosks to other virtual-currency business categories.

1 earlier distinct update(s)
Periodic update · new data 2026-09-22

Crypto Licensing

Tennessee's crypto licensing landscape tightened this cycle through a targeted prohibition rather than a comprehensive licensing overhaul. Public Chapter 766 bans virtual-currency kiosks statewide, making it a Class A misdemeanor to operate, install, permit, or host such a kiosk in Tennessee effective July 1, 2026. The statute carries no grandfathering provision for existing machines and no exemption for licensed financial institutions, meaning the prohibition is absolute for this specific channel regardless of the operator's existing regulatory standing. A federal court denied an industry temporary restraining order challenging the ban on July 7, 2026, allowing it to remain in force.

Outside this new prohibition, the state's underlying licensing architecture for crypto-adjacent businesses is unchanged. The Tennessee Department of Financial Institutions does not regulate virtual currency as such, and its published policy is explicit that the state money-transmitter license and its required surety bond do not extend to virtual-currency transmission. The operative boundary for licensing purposes remains the fiat-conversion leg: a business converting virtual currency to fiat currency for Tennessee customers falls within the state's money-transmission definition under the Tennessee Money Transmission Modernization Act and must hold a TDFI money-transmitter license. This boundary is directly sourced to TDFI's own published policy and independently corroborated by secondary legal-industry commentary describing the same fiat-conversion trigger.

The combined picture is one of narrow, channel-specific tightening layered on top of an otherwise unchanged and comparatively permissive licensing boundary for crypto-to-crypto activity, which continues to fall entirely outside Tennessee's state supervisory reach.

Outlook

Whether Tennessee will introduce any bespoke digital-asset licensing statute in a future legislative session remains an open question; the pattern to date favors narrow anti-fraud carve-outs, such as this cycle's kiosk ban, over comprehensive licensing reform. The precise current enforcement posture of the Tennessee Attorney General toward unregistered crypto exchanges operating with no fiat-conversion leg is not yet clear given TDFI's explicit disclaimer of jurisdiction over pure crypto-to-crypto activity.

1 further periodic run re-emitted the standing brief unchanged and is not shown.

Sources and findings (3)
  1. T1 · Nationwide Multistate Licensing System / Tennessee Department of Financial InstitutionsNationwide Multistate Licensing System / Tennessee Department of Financial Institutions — Businesses engaged in virtual-currency exchange or custody activity in Tennessee are subject to the state's general money-transmitter licensing requirement administered via the NMLS, with no dedicated crypto-specific licence distinct from the general MTL regime confirmed.retrieved M4bindingin force
  2. T4 · The BlockThe Block — Tennessee Governor Bill Lee signed House Bill 2505 on April 13, 2026, prohibiting the installation or operation of virtual-currency kiosks (crypto ATMs) statewide, extending liability to host businesses, with violations constituting a Class A misdemeanor.retrieved M5bindingin force
  3. T3 · CoinDeskCoinDesk — The Tennessee Sports Wagering Council issued cease-and-desist orders in January 2026 to Kalshi, Polymarket, and Crypto.com, alleging that their crypto-linked sports event contracts constitute unlicensed gambling under state law, an action currently being challenged in federal court on federal preemption grounds.retrieved M4bindingin force

#

Tennessee has no state-level statutory taxonomy classifying crypto-assets as securities, e-money tokens, or utility tokens. Per the seed disambiguation, token characterisation for securities purposes is governed by federal SEC/CFTC jurisdiction, not a Tennessee-specific scheme. Tennessee's 2018 law recognizing blockchain data and smart contracts as legally valid records provides a narrow, adjacent form of legal recognition but does not constitute a token classification regime.

Standing sub-brief · as of 25 August 2026134 words · last cycle 2026-09-28

Token Classification

Tennessee incorporated the 2018 and 2022 Uniform Commercial Code amendments into Title 47 via Public Chapter 704, introducing the "controllable electronic records" concept and associated control rules, effective July 1, 2026, with a transition adjustment date of July 1, 2027. This is a commercial-law and property-law development governing how rights in digital assets are perfected and transferred as a matter of state commercial law; it is not a securities or commodity classification determination and does not itself resolve how any particular token is treated under Tennessee or federal law. No dedicated token-classification regime otherwise exists in the state.

Periodic update · new data 2026-09-28

Token Classification

Tennessee has no dedicated regulatory token-classification regime, but Public Chapter 704's amendments to the Uniform Commercial Code represent the closest the state comes to a formal digital-asset taxonomy. The amendments add UCC rules for controllable electronic records and revise the UCC's definition of money to exclude certain electronic records that lack government authorization or adoption. This is a secured-transactions and commercial-law classification, not a securities- or money-transmission-style regulatory classification: its function is to determine how a party can perfect a security interest in a digital asset and what counts as 'money' for UCC purposes, rather than to determine which regulator has jurisdiction over a given token or how it must be offered or sold.

The amendments take effect July 1, 2026, with a further transition and adjustment date of July 1, 2027, giving market participants and their counsel a year beyond the nominal effective date to adjust existing security arrangements. This structure -- effective date followed by an extended adjustment window -- suggests the legislature anticipated that perfecting security interests in digital assets under the prior UCC Article 9 framework alone had been unsettled in practice, and the new rules for controllable electronic records are meant to resolve that uncertainty going forward rather than retroactively unwind existing arrangements.

Because this is commercial law rather than a regulatory licensing or disclosure regime, it does not classify tokens as securities, commodities, or money-transmission instruments for regulatory purposes, and it should not be read as Tennessee taking a position on the broader token-classification debates playing out at the federal level.

Outlook

The transition and adjustment window running to July 1, 2027 is the key date to track. Watch for practitioner guidance or TDFI commentary on how the controllable-electronic-records framework interacts with the state's separate virtual-currency licensing exclusion, since the two instruments address adjacent but distinct questions -- one commercial-law, one regulatory-licensing -- that have not yet been formally reconciled.

1 further periodic run re-emitted the standing brief unchanged and is not shown.

Sources and findings (2)
  1. T1 · Nationwide Multistate Licensing System / Tennessee Department of Financial InstitutionsNationwide Multistate Licensing System / Tennessee Department of Financial Institutions — Tennessee has not enacted a state-specific statutory taxonomy for classifying crypto-assets (e.g., as securities, utility tokens, or stablecoins); such classification for securities purposes defaults to federal SEC/CFTC jurisdiction.retrieved M3non-binding
  2. T3 · CoinDeskCoinDesk — Tennessee Governor Bill Haslam signed legislation in March 2018 legally recognizing blockchain data and smart contracts under state law, passing both legislative chambers unanimously.retrieved M2bindingin force

#

No Tennessee-specific statute or regulation governing staking, DeFi lending, DEX operation, mining, node operation, validator activity, or tokenization has been identified. The one Tennessee nexus in this space is procedural/venue-related: a federal tax dispute over Tezos staking-reward taxation (Jarrett v. United States) was litigated in the U.S. District Court for the Middle District of Tennessee, but this is a federal tax matter, not a Tennessee on-chain-activity regulation, and produced no binding precedent because the case was resolved via IRS refund rather than judicial ruling.

Absence reason not determinableNo sub-brief exists and the JID records no gap or review marker explaining why. The renderer will not invent a reason.

no periodic updates on record for this sub-brief

Sources and findings (2)
  1. T1 · Nationwide Multistate Licensing System / Tennessee Department of Financial InstitutionsNationwide Multistate Licensing System / Tennessee Department of Financial Institutions — Tennessee has no state-specific statute or regulation addressing staking, DeFi lending, DEX operation, mining, node operation, validator activity, or tokenization; the jurisdiction has no analog to a bespoke on-chain-activity regime.retrieved M2non-bindinga fact about the regime
  2. T3 · CoinDeskCoinDesk — A federal lawsuit over the taxation of Tezos proof-of-stake validator rewards (Jarrett v. United States) was filed and litigated in the U.S. District Court for the Middle District of Tennessee, but the case was resolved via an IRS refund rather than a judicial ruling, leaving no binding precedent on staking-reward taxation.retrieved M2non-binding

#

Tennessee has not enacted a state-specific stablecoin authorization, reserve, redemption, or systemic-designation regime. Stablecoin issuance and reserve requirements in this jurisdiction are governed exclusively by the federal GENIUS Act framework; Tennessee has no independent state-level overlay identified.

Absence reason not determinableNo sub-brief exists and the JID records no gap or review marker explaining why. The renderer will not invent a reason.

no periodic updates on record for this sub-brief

Sources and findings (1)
  1. T1 · Nationwide Multistate Licensing System / Tennessee Department of Financial InstitutionsNationwide Multistate Licensing System / Tennessee Department of Financial Institutions — Tennessee has no state-specific stablecoin issuance-authorisation, reserve-requirement, redemption-right, or systemic-designation statute; stablecoin regulation in this jurisdiction is governed by the federal GENIUS Act rather than a Tennessee-specific regime.retrieved M3non-bindinga fact about the regime

#

Tennessee's principal crypto-specific consumer-protection intervention is the statewide ban on virtual-currency kiosks (HB 2505, effective July 1, 2026), enacted directly in response to elder-fraud and scam losses associated with crypto ATMs, which nationally totaled roughly $389 million in reported losses in 2025 according to FBI data cited in reporting. Beyond the kiosk ban, no broader Tennessee-specific statute mandating crypto risk disclosure, custody segregation, or complaint-handling for exchanges/custodians has been identified; such matters would default to general state consumer-protection and money-transmitter licensing law.

Standing sub-brief · as of 25 August 2026125 words · last cycle 2026-09-28

Consumer Protection

The Tennessee Attorney General publicly justified the statewide virtual-currency kiosk ban on the basis that cryptocurrency ATMs are used as tools by scammers targeting vulnerable Tennesseans, framing the measure as consumer-protection and fraud-prevention policy rather than AML or licensing reform. The Attorney General's office also defeated an industry motion for a temporary restraining order that sought to delay the ban's effective date, allowing the prohibition to take effect on schedule. This enforcement-driven, fraud-typology-focused rationale is currently the operative consumer-protection lever for virtual-currency risk in Tennessee, rather than any dedicated crypto-specific disclosure or custody-protection statute.

Periodic update · new data 2026-09-28

Consumer Protection

Tennessee's principal crypto-consumer-protection development this cycle operates through prohibition rather than disclosure or custody regulation. Public Chapter 766's virtual-currency-kiosk ban functions as a consumer-protection measure by eliminating a channel closely associated with elder-fraud and romance-scam cash-to-crypto conversion schemes, rather than by imposing warning-label, transaction-limit, or disclosure requirements on kiosk operators as some other states have chosen to do. The policy choice is elimination of the channel rather than mitigation of its risks while it continues to operate.

This approach is consistent with Tennessee's broader posture toward virtual-currency activity: where the state has acted, it has generally chosen criminal prohibition of a specific, narrowly-defined activity (kiosk operation) over building out a licensing or disclosure regime that would allow the activity to continue under supervision. The effect for consumers is that, from July 1, 2026, the physical cash-to-crypto kiosk channel -- often the entry point for fraud victims coerced into converting cash to crypto for onward transfer to scammers -- will no longer be lawfully available anywhere in the state, regardless of whether any given kiosk operator was itself well-run or poorly-run.

This is a narrower consumer-protection intervention than a comprehensive virtual-asset consumer-protection statute would provide: it addresses one fraud vector (kiosk-based conversion) without addressing consumer protection for online exchange, custody, or wallet-service relationships, which continue to fall outside any Tennessee-specific licensing or disclosure framework.

Outlook

Watch whether Tennessee follows the kiosk-prohibition model with further narrowly-targeted consumer-protection interventions addressing other cash-to-crypto or crypto-to-cash conversion vectors, or whether it moves toward a broader disclosure-based consumer-protection framework for virtual-currency businesses generally. The absence of formal disclosure or custody requirements for online exchange and custody relationships remains a gap distinct from the kiosk-specific intervention.

1 earlier distinct update(s)
Periodic update · new data 2026-09-22

Consumer Protection

Tennessee's crypto-related consumer protection posture tightened this cycle around a single, targeted measure: the statewide ban on virtual-currency kiosks, framed explicitly by the Tennessee Attorney General as a consumer-protection measure against fraud targeting vulnerable residents. The Attorney General's office stated that a federal court had allowed the ban to take effect over industry objection, confirming both the measure's consumer-protection rationale and its survival of a legal challenge as of July 7, 2026.

This is an active, enforced consumer-protection intervention for the specific kiosk channel, but it does not reflect a general custody, disclosure, or consumer-safeguard rule applicable to crypto businesses broadly operating in Tennessee. No broader crypto-specific consumer-protection statute — covering matters such as custody standards, marketing disclosures, or complaint-handling requirements for crypto exchanges or wallet providers generally — was identified this cycle. The consumer-protection posture is therefore best characterized as reactive and channel-specific: it addresses a documented fraud vector directly rather than establishing a general regulatory floor for consumer protection across the crypto sector in the state.

Outlook

Whether Tennessee extends similar targeted consumer-protection measures to other crypto-adjacent channels identified as fraud vectors remains to be seen. Given the state's demonstrated willingness to act decisively against a specific channel once a fraud pattern is documented, a comparable response to any newly identified conduit would be consistent with this cycle's approach, though no such action has been identified as of this cycle.

1 further periodic run re-emitted the standing brief unchanged and is not shown.

Sources and findings (2)
  1. T4 · The BlockThe Block — Tennessee's statewide prohibition on virtual-currency kiosks, enacted via HB 2505 and effective July 1, 2026, operates as a consumer-protection measure against fraud, following FBI data reporting nearly $390 million in crypto-kiosk-related losses nationally in 2025, with older Americans disproportionately affected.retrieved M5bindingin force
  2. T1 · Nationwide Multistate Licensing System / Tennessee Department of Financial InstitutionsNationwide Multistate Licensing System / Tennessee Department of Financial Institutions — No Tennessee-specific statute mandating custody segregation, risk disclosure, or complaint-handling procedures for crypto exchanges or custodians beyond the kiosk ban and general MTL licensing framework has been identified.retrieved M2non-bindingour coverage gap, expected to resolve on a re-run

#

Tennessee is one of the U.S. states with no state personal income tax, meaning no state-level capital gains tax applies to individual crypto-asset gains; state tax exposure on crypto transactions is effectively nil, though federal capital-gains and income-tax rules (IRS treatment of crypto as property) apply uniformly regardless of state. A notable federal tax dispute over the taxability of proof-of-stake rewards was litigated in the Middle District of Tennessee (Jarrett v. United States) but was resolved via IRS refund without a precedential ruling, leaving the federal question of staking-reward timing unresolved.

Absence reason not determinableNo sub-brief exists and the JID records no gap or review marker explaining why. The renderer will not invent a reason.

no periodic updates on record for this sub-brief

Sources and findings (2)
  1. T3 · CoinDeskCoinDesk — Tennessee is one of nine U.S. states with no state income tax, meaning individual crypto-asset capital gains are not subject to any Tennessee state-level income or capital-gains tax; only federal capital-gains tax applies.retrieved M4bindingin force
  2. T3 · CoinDeskCoinDesk — Federal IRS guidance treats crypto-assets as property for tax purposes, with staking rewards generally treated as ordinary income upon receipt; this federal position was tested but not overturned in a Tennessee-venued lawsuit (Jarrett v. United States) that was resolved via IRS refund without setting binding precedent.retrieved M3bindingin force

#

No Tennessee-specific statute restricting outbound crypto-asset transfers, imposing state-level cross-border reporting thresholds, or extending the travel rule beyond federal requirements has been identified. Federal OFAC sanctions-screening and FinCEN's funds/travel-rule obligations apply uniformly to Tennessee-domiciled money transmitters engaged in convertible-virtual-currency transactions, without a distinct state overlay.

Absence reason not determinableNo sub-brief exists and the JID records no gap or review marker explaining why. The renderer will not invent a reason.

no periodic updates on record for this sub-brief

Sources and findings (1)
  1. T1 · FinCEN / U.S. Department of the TreasuryFinCEN / U.S. Department of the Treasury — Tennessee imposes no state-specific outbound restriction, cross-border reporting threshold, or travel-rule requirement on crypto-asset transfers beyond the federal baseline; any non-exempt Tennessee money transmitter engaged in convertible virtual currency transactions must register with FinCEN within 180 days of commencing such activity and comply with the federal Funds Travel Rule.retrieved M3bindingin force

#

Crypto AML/CFT obligations for this jurisdiction are handled under the fleet's shared Financial Integrity Module (FIM) subscription for aml_ctf; per the module-subscription reminder, no aml_cft_regime claims are produced in this baseline. Disambiguation context only: federal FinCEN money-transmitter/MSB obligations (registration, recordkeeping, SAR/CTR reporting, travel rule) apply uniformly to Tennessee-based virtual-currency businesses absent any state-specific AML overlay.

Absence reason not determinableNo sub-brief exists and the JID records no gap or review marker explaining why. The renderer will not invent a reason.

no periodic updates on record for this sub-brief

Sources and findings (1)
  1. T1 · FinCEN / U.S. Department of the TreasuryFinCEN / U.S. Department of the Treasury — AML/CFT obligations for crypto in this jurisdiction are governed by the fleet's shared Financial Integrity Module (FIM) subscription; this baseline does not produce aml_cft_regime claims per the module-subscription reminder.retrieved M1non-bindinga fact about the regime
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Editorial metadata for Tennessee, USA
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