In recent years, cryptocurrency has emerged as a popular form of investment and financial transactions, with many people turning to digital currencies like Bitcoin and Ethereum. However, the rise of these digital assets has also led to the emergence of illicit activities, with criminals increasingly using crypto ATMs to launder money and conduct illegal transactions.
In response to this growing threat, the UK’s financial watchdog has launched its latest crackdown on crypto ATMs, with a particular focus on London, where many of these machines are located. The regulator has taken a hard stance against using these ATMs for illicit activities and is determined to end their use in the country.
UK Tightens Scrutiny on Crypto
The collapse of Silvergate bank and SEC’s legal actions on the crypto space have forced several countries to come up with tight regulations. Authorities in East London have intensified their efforts to disrupt unregistered and high-risk businesses by cracking down on suspected illegal cryptocurrency ATMs.
The Financial Conduct Authority (FCA) and the police have conducted a joint operation to swoop on several sites in the area. Following the operation, the FCA announced on Wednesday that it is reviewing evidence gathered from “a number of sites” and is considering further action. This comes just a month after the FCA launched a similar crackdown in Leeds, another city in the north of England.
The authorities carried out the inspections under the money laundering regulations, which enable officers to enter premises without a warrant, monitor activities, request explanations about documents or information, and obtain copies.
Crypto ATMs, or CATMs, provide individuals with a means to purchase or convert money into crypto assets. However, since no CATM operators are registered with the FCA, any operation of these machines in the UK would be a violation of the country’s anti-money laundering regulations.
FCA May Soon Shut Down Crypto ATMs
The FCA has been cautioning consumers for some time that cryptoassets are not regulated and that investors must be prepared to lose their entire investment. Last year, the FCA issued a warning to CATM operators, ordering them to shut down their machines or face additional investigation.
According to CoinATMRadar, a website that enables users to locate CATMs worldwide, there were over 270 cash points in Britain in 2020. However, the website now lists only 19 locations, with 12 in London, six in Birmingham, and one in Manchester.
Marcus Sotiriou, an analyst at crypto brokerage Globalblock, said:
“It is very possible that they are going under the radar. But there is also definitely an element of fear and uncertainty about what the FCA is going to do next.”
While the crackdown on crypto ATMs may be seen as a blow to the cryptocurrency industry, it is a necessary step to combat illegal activities and ensure the safety and security of the financial system. In addition, the regulator’s efforts will help build trust and confidence in using digital currencies and ensure that they are used for legitimate purposes only.