Good day everyone,
I hope you are all well and having an excellent week, welcome to CryptoGod-1’s blog on all things crypto. Today I will be looking at the recent rise of crypto ATM's in the United Kingdom, and how the country has been cracking down on them.
Crypto ATM's
Crypto automated teller machines (ATMs) are a type of electronic kiosk, similar to traditional stand-alone automated teller machines, where users are able to buy or sell cryptocurrencies in exchange for cash or by the use of a debit / credit card. All of these Crypto ATM's are known to sell Bitcoin, and often have been dubbed "Bitcoin ATM's." Some are also capable of selling other cryptocurrencies, although not all, and it is also important to note that not all ATM's allow the function of selling Crypto.
They function by converting deposited cash into crypto and applying that transaction onto the blockchain for processing. To make use of a crypto ATM a user first needs to connect their digital wallet as that is where any purchased crypto will be stored. They are also known to charge extremely high transaction fees, which may include a crypto exchange fee, cash exchange fee, or card processing fee. Some of these ATM's are known to charge fees as high as 20% although the average fee is expected to be around 15%.
In terms of popularity, these ATM's are located around the globe, although the most popular country for Crypto ATM's has always been the United States. The nation contains more than 34,000 crypto ATMs, and there are also thousands available in Canada. The popularity is not quite the same in other nations, although these ATM's can be found in most countries.
Financial Conduct Authority
The Financial Conduct Authority (FCA) work to regulate the financial services industry in the U.K. and its role includes protecting consumers while also keeping the industry stable. They are also tasked with ensuring the promotion of healthy competition between financial service providers.
Back in March 2022 the FCA announced that there was no company within the U.K. offering Crypto ATM's via a legal service. This is because there were no licences issued for the operation of such ATM's, according to the FCA. They stated that all Crypto ATM's were required to be licenced and therefore any one operating in the U.K. would be required to shut down immediately. They noted:
"We regularly warn consumers that crypto-assets are unregulated and high-risk which means people are very unlikely to have any protection if things go wrong."
The FCA have since announced a continuation of their regulatory efforts against illegal crypto activity, namely the operation of Crypto ATM's without a licence. They have cited their powers under the Money Laundering Regulations Act of 2017 as the driving force behind this clampdown. In a press release on the 5th of May 2023 the FCA announced it has recently been collaborating with local authorities in shutting down a number of unregistered Crypto ATM's. These ATM's were located in three cities across the nation, in Exeter, Nottingham, and Sheffield.
The Executive Director of Enforcement and Market Oversight at the FCA, Therese Chambers, stated:
“Crypto ATMs operating without FCA registration are illegal. The action we’ve taken over the past few months and wider work shows that we will act to stop illegal activity.”
They have also noted how important it is that these raids not only happen, but that the public are made aware. The apparent risks of these illegal crypto ATM's, according to the FCA, is due to the fact that the U.K. is a region lacking a comprehensive regulatory framework for cryptocurrency and digital assets. They also believe these machines are used for money laundering, and the movement of funds acquired in criminal activity. The Head of Economic Crime at the Yorkshire and Humber Regional Organized Crime Unit (YH ROCU), Ramona Senior, noted:
“Our Regional Cyber Crime Unit officers are pleased to work jointly with the Financial Conduct Authority and other partner agencies to target the use of unregulated crypto ATMs. Machines such as these are a key component in the facilitation of money laundering and the movement of funds acquired through criminal activity.”
It's a very interesting case in terms of how the U.K. are tackling crypto. They are being strong and firm in terms of their non compliance with these Crypto ATM's, while the nation has also been swift to remove many banks from being allowed to send customer funds to crypto exchanges. Certainly for those interested in the space, the lack of regulation and the tough levels of scrutiny around crypto is making the space difficult to use and access, but there are still many in the U.K. who want to be a part of crypto. It is important for the government and their agencies to strike a proper balance.
Have a great day.
Peace. CryptoGod-1.
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