UK FCA crackdown hits crypto ATMs

Unregistered cryptocurrency ATMs are coming under fire from the UK's Financial Conduct Authority (FCA). According to the regulator, it entered and inspected several locations close to Leeds in the North of England that were thought to be home to crypto ATMs being run illegally. In addition, the FCA stated that it collaborated with regional law enforcement agencies, including the Digital Intelligence and Investigation Unit of the West Yorkshire Police, as part of the joint investigations into websites suspected of hosting crypto ATMs being run illegally.

Mark Steward, the executive director of enforcement and market oversight at the FCA, claims that UK-based cryptocurrency businesses must register with the FCA for anti-money laundering reasons. Cryptocurrency products, however, are currently high-risk and unregulated.

The announcement states that the FCA will evaluate the proof gathered during these visits and consider additional enforcement. According to Detective Sergent Lindsay Brants of the Force Cyber Team of the West Yorkshire Police, they sent cease-and-desist letters to operators. Additionally, any violation of the law would result in a money-laundering investigation.

In March 2022, the FCA sent a letter to all crypto operators and hosts. It cautioned them about the legal repercussions of using crypto ATMs without permission from the company. Although crypto ATMs are not expressly forbidden by UK law, as of the time of writing, none have been approved by the FCA. There are links between cryptocurrency ATMs and money laundering. In addition, legal authorities have drawn attention to possible links between these ATMs and organized crime. The UK aims to enact stricter cryptocurrency regulations everywhere, not just for crypto ATMs.

Additionally, businesses that do not adhere to the regulations risk receiving criminal sentences of up to two years in prison.