In recent years, the use of Bitcoin ATMs has increased in the United Kingdom. These ATMs allow people to buy and sell Bitcoin and other cryptocurrencies using cash.
While Bitcoin ATMs can be a convenient way to enter the cryptocurrency market, they can also be used for illegal activities such as money laundering and terrorist financing.
This is why the UK’s Financial Conduct Authority (FCA) has cracked down on illegal and unregistered Bitcoin ATMs.
The FCA’s fight against illegal Bitcoin ATM
The FCA is the regulatory body responsible for overseeing the financial services industry in the United Kingdom.
Its mission is to protect consumers, ensure market integrity and promote competition in the financial sector.
As part of its efforts to achieve these goals, the FCA has challenged the growth of unregistered and illegal Bitcoin ATMs.
According to the FCA, any company that wishes to operate a Bitcoin ATM in the United Kingdom must be registered with it as a cryptocurrency company.
This is because Bitcoin and other cryptocurrencies are considered coins in their own right and the FCA has regulatory authority over all cryptocurrency companies operating in the UK.
In addition, any company operating a Bitcoin ATM must comply with anti-money laundering (AML) and counter-terrorist financing (CTF) regulations.
Despite these regulations, there have been numerous reports of illegal and unregistered Bitcoin ATMs operating in the UK.
Bitcoin ATM location
These ATMs are often located in convenience stores, bars, and other public places. They allow individuals to buy and sell Bitcoin without going through a registered cryptocurrency company, which means they may not be compliant with AML and CTF regulations.
The FCA has cracked down on these illegal and unregistered Bitcoin ATMs in several ways. First, it warned the public about the risks of using unregistered ATMs. The FCA stated that unregistered ATMs may not comply with AML and CTF regulations, which means that people using them could risk unknowingly participating in illegal activities.
Second, the FCA has taken enforcement action against firms that operate unregistered Bitcoin ATMs.
In 2020, the FCA issued a warning to a company called Buy2LetCars, which operated an unregistered Bitcoin ATM in London.
The FCA stated that Buy2LetCars was not a registered cryptocurrency company and that its Bitcoin ATM was not compliant with AML and CTF regulations. The FCA also warned the public that the use of Buy2LetCars’ Bitcoin ATM could be illegal.
Third, the FCA collaborated with other regulatory bodies to combat the use of unregistered and illegal Bitcoin ATMs. In 2020, the FCA collaborated with the Metropolitan Police to shut down an unregistered Bitcoin ATM operating in a London convenience store. The ATM had been used to launder more than £1.5 million in cash.
UK effort to regulate the industry
The FCA’s actions against illegal and unregistered Bitcoin ATMs are part of a broader effort to regulate the cryptocurrency market in the United Kingdom.
Although cryptocurrencies such as Bitcoin have been around for more than a decade, they are still a relatively new asset class. As a result, investment in cryptocurrencies comes with a great deal of uncertainty and risk.
To address these risks, the FCA has implemented a number of regulatory measures.
For example, it requires all cryptocurrency firms operating in the United Kingdom to be registered with the FCA. In addition, these firms must comply with AML and CTF regulations.
In addition, the FCA has warned the public about the risks of investing in cryptocurrencies and issued guidance to help consumers make informed investment decisions.
Although the FCA’s actions against illegal and unregistered Bitcoin ATMs may seem like a small part of the overall efforts to regulate the cryptocurrency market, they are an important part of that effort.
Unregistered ATMs are often used to facilitate illegal activities such as money laundering and terrorist financing. By cracking down on these ATMs, the FCA is sending a clear message:
“illegal activities will not be tolerated in the cryptocurrency market.”
In addition, the FCA’s actions help protect consumers who may not be aware of the risks associated with illegal and unregistered Bitcoin ATMs.
By issuing warnings and taking enforcement action, the FCA is helping to ensure that consumers can make informed decisions about their investments in the cryptocurrency market.
Criticism of the UK FCA’s financial authorities
However, some critics have argued that the FCA’s regulatory measures are too strict and can stifle innovation in the cryptocurrency market.