The Financial Conduct Authority (FCA), in collaboration with law enforcement agencies, has taken action against unregistered cryptocurrency ATMs in the UK. A total of 26 crypto ATMs, operating unlawfully across the country, have been disrupted as part of this crackdown.
Crypto ATMs enable users to buy and sell cryptocurrency in exchange for cash or through debit card transactions. While they may resemble traditional teller machines, they do not connect to a bank account. Instead, they link with the user’s digital wallet to process the transaction.
While most ATMs require users to provide their phone number for identity verification, some may require additional verification steps. None of the crypto ATMs in the UK are registered with the FCA, making them illegal operators. The FCA has issued a warning, advising users not to trust these machines with their assets to avoid falling victim to scammers and potential financial losses.
FCA executive Steve Smart emphasized the risks associated with using unregistered crypto ATMs, stating, “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. You will not be protected if something goes wrong, and you could lose your money.”
Users who face issues during transactions are unlikely to receive assistance from the ATM operator, as effective channels of communication are lacking. To illustrate this point, the FCA reported the case of an individual in Sheffield who lost £1,000 after purchasing cryptocurrency from an ATM that did not process the transaction successfully. The user was unable to contact the machine’s operator or retrieve their funds.
These unregistered crypto ATMs can be found in various locations such as shopping centers, convenience shops, gas stations, airports, pubs, bars, restaurants, and barber shops. Since the beginning of the year, the FCA has inspected 34 suspected locations hosting crypto ATMs across the UK.
The FCA stated its commitment to warning the public about these unregistered operators and taking appropriate enforcement actions. The inspections were carried out in collaboration with regional organized crime units and covered sites in cities including London, Exeter, Nottingham, and Sheffield.
Ramona Senior, regional head of economic crime, highlighted how unregulated crypto kiosks facilitate money laundering and the movement of funds for criminals. The FCA has published a comprehensive list of UK businesses suspected of engaging in unregistered cryptoasset activities, including several venues in central London. Following the publication of this list, the FCA estimates that 110 unregistered crypto firms are no longer operational.
It is important to note that not all crypto ATMs offer both buying and selling options. Some only allow users to purchase cryptocurrency, while others facilitate one-way transactions. To sell cryptocurrency, users typically scan a QR code in their digital wallet and receive a chosen cash amount from the ATM.
Retailers hosting crypto ATMs usually display symbols of different cryptocurrencies, such as Bitcoin, on the shops or the machines themselves. A Bitcoin ATM map reveals the presence of three cash ATM locations in the UK, including Milton Keynes, Manchester, and Worcester.
As of November 1, 2022, there were nearly 39,000 Bitcoin ATMs worldwide, according to statistics website Statista. Most of these ATMs are located in the United States.
To combat money laundering and scams involving crypto ATMs, the FCA is collaborating with the National Economic Crime Centre. The FCA has previously warned operators to shut down their machines or face enforcement action.
In conclusion, the FCA’s crackdown on unregistered crypto ATMs in the UK serves as a reminder to users about the risks associated with utilizing these machines. Without the FCA’s registration, these ATMs operate illegally, leaving users vulnerable to potential scams and financial losses. The FCA urges the public to exercise caution and refrain from using these unregistered ATMs to protect their assets.