Bitcoin Depot Inc.’s recent bankruptcy is part of a larger downturn in the crypto ATM operator industry spurred by a regulatory crackdown over concerns of widespread fraud.

The niche corner of the crypto world has seen systemic decline in North America, with former leader Bitcoin Depot’s 9,700 kiosks going dark last month after management found it couldn’t implement anti-fraud measures while maintaining a viable business.

With state-level restrictions capping transaction fees and imposing daily limits, criticism from the Federal Trade Commission, and outright bans considered in US localities and Canada, the sector has contracted even as crypto overall has been …