The UK’s financial regulator is coming down hard on unregistered cryptocurrency automated teller machines (ATMs) as it announces a crackdown on operators flouting the law.
The UK’s Financial Conduct Authority (FCA) has come down heavily on unregistered cryptocurrency automated teller machines (ATMs) as it declares all such ATMs in the country illegal. The announcement was made on February 14, 2023, with the FCA emphasizing that all crypto exchange providers, including crypto ATM operators, must comply with the UK’s money laundering regulations and be registered with the FCA. The move underscores the FCA’s efforts to enforce regulatory compliance in the rapidly evolving cryptocurrency market and protect investors from financial crime.
Action taken against unregistered crypto ATM operators
The FCA, in collaboration with West Yorkshire Police’s cyber team, has taken action against several sites in and around Leeds city that are suspected of hosting illegally operated crypto ATMs. Local enforcement officers have issued several warning letters to crypto ATM operators, requesting them to cease and desist using the machines. Police detective sergeant Lindsey Brants has warned that any breach of regulations would result in an investigation under money-laundering regulations.
Number of affected operators
The FCA’s action against crypto ATMs is expected to affect a significant number of ATM operators, as there are at least 28 locations providing Bitcoin ATMs in the UK, according to data from Coin ATM Radar. More than 50% of those crypto ATM locations are situated in London, with additional locations near Birmingham, Manchester and Nottingham, the data shows.
FCA’s warning to investors
The FCA’s executive director of enforcement, Mark Steward, has warned investors that crypto products are currently unregulated and high-risk, and that they should be prepared to lose all their money with crypto. He emphasized that unregistered crypto ATMs operating in the UK are doing so illegally, and the regulator will continue to disrupt unregistered crypto businesses in the country.
Previous action by FCA
This is not the first time that the FCA has taken action against crypto ATMs in the UK. In March 2022, the same authority issued a similar statement on the termination of Bitcoin ATMs in the country, calling ATM operators to “shut down or face further action.”
Registered crypto firms
The FCA has so far authorised registration for a total of 41 UK-based cryptocurrency businesses. These include, among others, websites like Gemini, Zodia Custody, Bitpanda and Revolut. In order to ensure that these registered businesses abide by UK money laundering laws, the FCA has granted them permission to conduct business in the country. Establishing investor trust and ensuring that the UK’s cryptocurrency business is secure and well-regulated depend on the FCA’s regulatory approval.
Conclusion
By taking action against unregistered crypto ATMs in the UK, the FCA has sent a clear message to the crypto industry that regulatory compliance is mandatory. The FCA’s insistence on adherence to money laundering regulations demonstrates the UK’s resolve to combat financial crimes and safeguard the interests of investors. With the constantly evolving nature of the crypto industry, we can expect further regulatory scrutiny and enforcement actions to ensure the safety and security of investors and the overall stability of the financial system.
News Source: FCA
