The UK’s Financial Conduct Authority (FCA) said Friday that all cryptocurrency ATMs operating in the country were doing so illegally, and ordered operators to shut them down immediately.
Britain’s main financial regulator said operators had to abide by UK money laundering regulations, and no one had done so. The regulator said the ATMs, which allow users to convert crypto to fiat and vice versa, have had minimal controls and could be used as a money laundering tool.
In particular, the regulator criticized the lack of know your customer (KYC) requirements for small transactions.
According to coinatmradar data, there are currently around 70 crypto ATMs operating in the UK.
The FCA has always taken a conservative approach to cryptocurrencies. Recently, the agency said it had opened more than 300 cases related to crypto assets between April and September 2021. It has 50 live investigations, including criminal investigations, into unauthorized crypto companies.
Earlier this year, it had also set out strict restrictions on advertising for crypto products. In its announcement on Friday, the regulator said it continued to warn consumers about the unregulated and risky nature of crypto.
We regularly warn consumers that cryptoassets are unregulated and high risk meaning people are very unlikely to have any protection if something goes wrong so people should be prepared to lose all their money if they choose to invest in them.
-the FCA
Crypto ATMs a gray area
Given their ability to easily and anonymously convert crypto to fiat, cryptocurrency ATMs have faced a myriad of regulatory controls since their inception. In the United States, all ATM providers are required to have an effective anti-money laundering program written in their machines.
The United States has the highest number of cryptocurrency ATMs in the world, at more than 30,000 locations.
Earlier this year, crypto hub Singapore banned crypto ATMs as it took a tougher stance to protect investors from crypto-related scams and volatility. In particular, the Monetary Authority of Singapore said ATMs could lead the public to buy crypto without considering the risk, exposing them to the high degree of volatility in the market.
But El Salvador, which legalized Bitcoin last year, has widely adopted Bitcoin ATMs. The country has machines in more than 200 locations.
Disclaimer
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About the author
With over five years of experience in global financial markets, Ambar plans to leverage this knowledge for the fast-growing world of crypto and DeFi. His main interest lies in finding out how geopolitical developments could affect crypto markets and what that could mean for your bitcoin holdings. When he’s not scouring the internet for the latest news, you can watch him play video games or watch Seinfeld reruns. You can reach him at [email protected]
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