Government regulators are concerned about money laundering using all crypto ATMs illegal. The FCA is “warning” crypto ATM operators in the UK to “turn off their machines” or “face law enforcement action.” Therefore none of the Cryptocurrency ATMs currently operating in the UK are legal and should close.
Crypto ATMs are similar to cash ATMs but allow people to buy Bitcoins using their bank cards. The only problem is – none of them have a proper ATM license. Therefore, all crypto ATMs are illegal in the UK.
“Crypto ATMs offering crypto-asset exchange services in the UK must be registered with us and comply with the UK Money Laundering Regulations,”Financial Conduct Authority announce
Crypto ATMs have soared as the industry garners mainstream adoption. Where many ATMs around the world, regulators are starting to take notice of the industry.
Recently, the UK Financial Conduct Authority (FCA) warned all consumers not to use these digital asset ATMs on their land, as they are doing so illegally. Furthermore, the regulator highlighted that any machine offering cryptocurrency exchange. Services in the country must be registered and comply with their Money Laundering Regulations (MLR).
All Crypto ATMs Compliance Concerns UK Regulator
The Financial Conduct Authority city that none of the cryptocurrency companies registered with them have approved to offer ATM services. This means that all crypto ATMs operating in the country illegal and consumers should not use it because it violates the existing rules.
Regulators also underlined that they are concerned about the growing number of crypto ATMs operating in the UK. Therefore, they are looking to be able to contact the operator who instructs them that the machine must turn off.
Regulators have informed the company that weaker identity checks on users who deposit less than £250. Which mean there is a risk of “smurfing” where large numbers of “donkeys” keep small amounts to avoid detection.
The use of bitcoin ATMs has come under increasing scrutiny elsewhere in the world. New licensing guidelines from the Monetary Authority of Singapore (MAS) forced ATM operators there close in January.
In UK regulator Believes Cryptocurrency to be High Risk
In this case, FCA has received information from more than 240 cryptocurrency companies in the UK. However, neither company register with the regulator. However, it reports that 110 companies no longer operate. This means that there are still 130 companies crypto ATMs operating illegal.
Last month, the High Court, a British court, ruled against Gidiplus, which appealed against the regulator’s refusal to submit its application for registration under the Money Laundering Ordinance.
At a time like this, the FCA explained that the judge concluded a lack of evidence as to how Gidiplus would conduct its business in a broadly compliant manner. The FCA also highlights that it regularly warns consumers that cryptocurrencies are unregulated and high risk. Meaning individuals are doubtful to have protection if something goes wrong.
The news follows the seizure of three NFTs by Britain’s tax watchdog, Her Majesty’s Revenue and Customs, last month in a fraud investigation worth nearly $2 million.
Three people are arresting on suspicion of fraud due to the investigation. The suspect used a virtual private network (VPN), stolen identities, fake addresses, and unregistered phones to hide illegal activity.
This is the first seizure of a blockchain-based digital collection in the country.
What prompted the latest crackdown on bitcoin in the UK? It appears to be driven by concerns about money laundering and the fact that crypto ATMs don’t always have a way of positively identifying who is using them.