In a recent move, the British regulator has shown its strict behaviour towards cryptocurrencies and especially in respect to compliance. Considering its previous acts of crackdown on crypto ATMs, the prime financial regulator has pulled shutters on a significant number of ATMs in the country.
According to local media reports, the Financial Conduct Authority (FCA), had “disrupted” 26 of the 34 cryptocurrency ATMs it visited and inspected since the start of 2023. Crypto automated teller machines (ATMs) are stand-alone electronic kiosks that allow users to buy and sell crypto in exchange for cash or with a debit card. All crypto ATMs sell Bitcoin while some also offer other cryptocurrencies.
In regards to this crackdown on crypto ATMs, on February 14th, the FCA warned crypto ATM operators in the UK to either comply with regulations or shut down illegal operations. Following the warning, the regulator along with other law enforcement agencies started investigating 36 crypto ATM locations using powers under the Money Laundering Regulations 2017.
Referring to this, a senior executive at FCA said that the ownership of the crypto ATM itself is an illegal act. Cracking down on the use of crypto ATMs, Steve Smart, joint executive director of enforcement and market oversight at the FCA, stated:
If you use a crypto ATM in the UK, you are using a machine that is operating illegally and you may be handing your money over to criminals.
Further, Smart clarified that victims of scams involving the crypto or BitcoinATMs “will not be protected” by the government or the operator of the machines. Jointly in May and June, another 18 locations were inspected, right when the FCA publicly announced the commencement of the inspection drive.
The authorities have explicitly stated that all crypto exchanges and ATMs must be registered with the FCA and comply with the UK Money Laundering Regulations. Recently, Clive Police Department released a report explaining how a crypto scammer came under an unsuspecting victim pretending to represent law enforcement and managed to steal $6,000 while threatening an arrest warrant as reported by Todayq News.
As evident from the rising cases, scammers have been utilising fear tactics and impersonating law enforcement officials to deceive unsuspecting individuals into transferring funds through crypto ATMs. However, it is important to be observant and note that law enforcement agencies never contact individuals demanding payment over the phone or via crypto.
In the past months, the FCA has been very vigilant towards irregularities in the crypto sector. The regulator’s crackdown actions against unregistered crypto ATMs reflect the UK’s strict regulatory approach towards the crypto industry.
Overall, the regulator has been stepping up its efforts to combat financial crimes related to cryptocurrencies, such as money laundering and terrorism financing amid their dedication to regulate the sector. Additionally, FCA’s strict actions against the ATMs and the larger sector indicates its zero tolerance towards any illegal operations from the crypto sector.