UK's FCA Cracks Down on Unregulated Crypto ATM Operators

UK’s financial regulator, the Financial Conduct Authority (FCA), has cracked down on suspects whom it alleges were operating illegal crypto ATMs around Leeds, a city in the northern English county of Yorkshire.

According to an announcement today, the crackdown came after a rigorous evidence-gathering campaign from several sites around the city conducted in conjunction with West Yorkshire Police’s Digital Intelligence and Investigation Unit.

“Having conducted intelligence gathering work across West Yorkshire, we soon established the locations of several live crypto ATMs,” said Lindsey Brants, a detective with the Force Cyber Team at West Yorkshire Police.

Although no arrests were made, Mr Lindsey disclosed that they issued warning letters requesting the operators to “cease and desist” from using the   ATMs, failure to which they would face prosecutions under UK’s money-laundering regulations. However, the FCA noted that it would review evidence gathered during the visits and consider further potential enforcement action. 

Crypto ATMs are automated teller machines which allow customers to buy or sell cryptocurrencies such as Bitcoin and Ether using cash or debit/credit cards. While the machines are a convenient way to purchase cryptocurrency without needing a bank account or online exchange, they have remained largely unregulated in the UK. 

Commenting following the operation, Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, clarified that “unregistered Crypto ATMs operating in the UK are doing so illegally”. He further noted that they would continue identifying and taking down unregistered crypto businesses in the UK.

Typically, crypto firms that wish to open shop in the UK must register with the FCA for anti-money laundering, disclosure and customer protection purposes, including crypto ATM operators. However, most crypto products in the UK remain unregulated. Currently, no crypto ATM operators currently have FCA registration. According to the FCA, in the current regulatory environment, customers who invest in such products should thus “be prepared to lose all your money if you invest in them.” 

This is not the first time that the FCA is cracking down on illegal ATM operators. Last March, the regulator warned UK-based crypto ATM operators to shut down their machines or face enforcement action.

According to Coin ATM Radar’s crypto ATM directory, there are over 38,000 functional crypto ATMs globally. Europe currently has about 1,469 ATMs, with the UK accounting for just 28, a far cry from about 81 ATMs in March 2022. 

Source: Read Full Article