The United Kingdom Financial Conduct Authority (FCA) is again taking action against illegally-operating crypto automated teller machines (ATMs) in the country. This time the authorities are cracking down on ATMs operating in East London, last month, the agency conducted a similar operation in Leeds.
Crypto ATMs are stand-alone electronic kiosks that allow users to buy and sell cryptocurrency in exchange for cash or with a debit card. Sources reveal that the U.K. financial watchdog intends to identify and disrupt unregistered crypto businesses in the country. With that aim, it announced using its enforcement powers to inspect several sites in East London.
After conducting an operation in collaboration with the Metropolitan Police, the regulator will review the evidence before taking any further action. Mark Steward, the Executive Director of Enforcement and Market Oversight said that the recent steps are a clear warning for illegal crypto businesses in the country.
This operation, alongside last month’s action in Leeds, sends a clear message that we will continue to identify and disrupt unregistered crypto businesses in the UK.
Last month, the FCA collaborated with West Yorkshire Police’s Digital Intelligence and Investigation Unit to conduct similar raids in Leeds. In March 2022, the FCA declared crypto ATMs illegal due to money laundering concerns. Hence, no crypto ATM in the country has registration from the regulator. The FCA warns that crypto assets are unregulated and high-risk, and citizens might lose their total capital from crypto investments.
The press release on the regulator’s website mentions that the agency is working with the National Economic Crime Centre “to plan and coordinate action with law enforcement partners against operators of illegal crypto ATMs.” Additionally, crypto exchanges must register with the FCA and comply with money laundering standards to operate in the region.
In December, the FCA appointed Ashley Alder as their new head who launched a harsh attack on the larger crypto business raising the possibility of a confrontation between the authorities and crypto firms operating there. In his testimony before the Treasury Select Committee, Alder said that he had found crypto platforms to be “deliberately elusive.”
He also claimed large firms within the sector are involved in widespread money laundering. Alder warned that cryptocurrency businesses in the UK will face challenges as the FCA assumed additional regulatory responsibilities.
It is important to note that Rishi Sunak, the British prime minister, was known for his pro-crypto stance while he was serving as the finance minister. The investors, industry participants, and the masses hoped for the nation to become a crypto hub under his leadership, however, the FCA’s approach seems to be a hindrance to that.
In a letter dated January 19 to the Treasury Select Committee, Sarah Pritchard, the Financial Conduct Authority’s (FCA) executive director of markets supervision, policy, and competition, stated that they have identified possible financial crime or direct links to organized crime in few instances and that they have informed about these instances to relevant law enforcement agencies.
The agency had announced that it had received 300 applications from cryptocurrency businesses asking for permission to accept customers in the nation under its anti-money laundering regulations. Out of this, only 41 companies were able to register with the regulator. Pritchard said in the letter that the high rejection rate was due to The FCA’s aggressive stance during authorization, which considerably lowered the danger of crime.
Given the level of caution that the British authorities are carrying, there is a fair chance that they might altogether miss their chance of becoming a crypto hub. Todayq News reported that Philip Hammond, the former Chancellor of the Exchequer, expressed his concerns about the nation slipping behind in the race to establish itself as the crypto hub. The former minister recently took charge as the chairman of the crypto exchanges in the country and said that his company had to pull back its registration from the UK last year due to apparent slow processing from the FCA.