UK Regulators Crackdown On Crypto ATMs Sites

Feb. 15, 2023
UK Regulators Crackdown On Crypto ATMs Sites

Authorities in the UK have raided many spots in the city of Leeds on suspicion of illicit use of crypto automated teller machines (ATMs). The UK financial regulator, the Financial Conduct Authority (FCA), performed this operation in cooperation with West Yorkshire Police Digital Intelligence and its Investigation Unit.

According to a report from the FCA on Feb. 14, authorities have collected evidence from various sites across the city. However, they will consider possible action against operators of unapproved units, the report said.

The watchdog claimed all crypto ATMs in the UK operate without FCA registration. Meanwhile, the agency said they had previously warned all operators of the legal consequences of not registering with the agency.

These ATMs enable customers to buy or transfer funds into crypto assets. Coin ATM radar data shows that 28 sites provide crypto across the United Kingdom; more than 50% of crypto ATM locations are in London, mostly near Nottingham, Manchester, and Birmingham.

Deputy Sergeant Lindsey Brants of the cyber team at West Yorkshire Police said local enforcement officers had issued many warning letters to crypto ATM operators, urging operators to cease and desist.

Brants added:

“Any breach of regulations would result in an investigation under money-laundering regulations.”

Mark Steward, the FCA’s executive director of enforcement and market oversight, stated that the regulator would continue to crack down on anonymous crypto businesses in the UK.

He said:

“Unregistered Crypto ATMs operating in the UK are doing so illegally [and] we will continue to identify and disrupt unregistered crypto businesses operating in the UK.”

However, the executive emphasized that, like other crypto asset exchange providers, crypto ATMs must be registered with the FCA and comply with UK money laundering laws.

Pointing to crypto investors, he said:

”However, crypto products are currently unregulated and high-risk, and you should be prepared to lose all your money if you invest in them.”

Therefore, anyone who invests in crypto assets would suffer losses, the government official said.

This joint action was taken after a long period of evidence gathering using the powers conferred by the Anti-Money Laundering Regulations 2017.

Regulators Have Stepped Up Monitoring Of The Crypto Industry

The latest enforcement action against crypto ATMs in the UK is not the first by the FCA.

Meanwhile, the UK financial watchdog issued a similar statement on the termination of illegal Bitcoin ATMs operations in the country in March 2022.

In March, the regulator warned:

“We are concerned about crypto ATM machines operating in the UK and will therefore be contacting the operators instructing that the machines be shut down or face further action.”

Indeed, FCA’s recent action aims to keep people away from crypto fraud and unregistered businesses. According to a report by the UK Police Action Fraud Unit, cryptocurrency fraud in the UK increased by 32% to £226 million ($273 million) from October 2021 to September 2022.

At the time of writing, the FCA has granted permission to a total of 41 crypto firms to operate in the UK, including Genesis, Coinbase, Revolut, Gemini, Zodia Custody, and Bitpanda.

Recently, many cryptocurrency companies have faced multiple enforcement actions from US authorities. For example, after some investigation, the New York Department of Financial Services (NYDFS) ordered Paxos to cease issuing and minting its Binance USD (BUSD) currency.

Syed Ali Haider

Researcher & Editor
Ali Haider is a Blockchain enthusiast and writer passionate about enhancing the acceptance, adoption, and integration of Blockchain technology worldwide. He has also advocated for digital freedom and cybersecurity for many years.