UK Regulators Crack Down on Unlicensed Crypto ATMs
In a significant enforcement action, UK authorities have recently made a pair of arrests and seized seven cryptocurrency ATMs in southwest London. This marks a decisive step against unauthorized digital currency services as regulators intensify their oversight in this arena.
Regulatory Enforcement in London
The Financial Conduct Authority (FCA) released a statement revealing that two individuals were questioned under caution following coordinated searches conducted by the FCA and the Metropolitan Police at four different locations. Investigators suspect that these machines were part of a clandestine exchange network circumventing anti-money laundering regulations.
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Consequences of Non-Compliance
Operating a crypto ATM without proper registration can lead to severe repercussions. Since January 2021, any business offering cryptocurrency exchanges or ATM services is required to register with the FCA and conduct thorough customer due diligence. This involves verifying the origin of funds and ensuring that the machines are not being used for illicit activities. With the recent deactivation of seven ATMs and the ongoing inquiry into two suspects, authorities are sending a strong message about their commitment to enforcing these rules.
Alert on Unregistered Crypto ATMs
Therese Chambers, the FCA’s Executive Director of Enforcement and Market Oversight, highlighted the dangers associated with unregistered machines, stating that they primarily facilitate criminal activities. Currently, there are no legally operating crypto ATMs in the UK, and those found operating them face not only hefty fines but also potential imprisonment. Although no formal charges have been filed in this latest crackdown, the investigation continues to unfold.
Recent Legal Precedents
In a notable legal precedent, Olumide Osunkoya received a four-year prison sentence for running an unregistered crypto ATM operation through his company, GidiPlus. His machines circumvented standard security measures and imposed exorbitant fees of up to 60%. Despite his application for FCA registration being denied, he continued his operations using forged documents and was ultimately convicted of multiple offenses, including forgery and possession of criminal property.
Global Perspectives on Crypto ATM Regulations
The UK’s strict stance contrasts with various international approaches. In the United States, over 29,000 crypto ATMs are operational, though state regulators are implementing controls. Nebraska, for instance, has introduced licensing requirements, transaction limits, and scam refund procedures. Meanwhile, officials in Spokane, Washington, have opted to ban the machines entirely.
Elsewhere, New Zealand has enacted a complete national ban on such devices, and Australia has implemented new regulations that cap cash exchange amounts per transaction and mandate visible scam warnings on kiosks. This diverse regulatory landscape illustrates the lack of a unified approach, with some advocating for outright bans to deter criminal activity, while others argue that regulated machines can provide a safe avenue for individuals to purchase cryptocurrency.
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