All crypto-ATM firms in the UK are illegal, FCA says
It hasn’t been up to two months since Elliptic, a blockchain analytics firm, went public a report details its prediction for crypto regulations this year. The firm said 2023 will see increased sanctions in the crypto space as global regulators tighten regulation of the industry.
Elliptical reports have already begun to unfold as regulators engage in a series of enforcement actions around the world. For example, a recent report revealed that the Financial Conduct Authority (FCA) was cracking down on unregistered crypto-ATM operators in the United Kingdom (UK).
FCA issues stop orders to illegal crypto ATM operators
According to the FCA report, the UK watchdog investigated several sites in Leeds where it suspects illegal cryptocurrency ATM operations. The FCA, working with West Yorkshire Police’s Digital Intelligence and its Investigations Unit, gathered evidence from various locations around the city. According to their observation, all crypto-ATMs in the UK operate without licenses.
In a statement, the FCA’s executive director of enforcement and market oversight, Mark Steward, said the regulator will continue to go after unregistered crypto businesses in the UK.
The executive stressed that all ATM operators, including crypto-ATMs, must register with the FCA and comply with UK anti-money laundering rules. He added that crypto products are “high-risk ratings” and “lack regulatory oversight.” So anyone who invests in them could incur losses, according to the authorities.
Deputy Sergeant Lindsey Brants from the Force Cyber Team at West Yorkshire Police also commented. According to the Brants, the recent investigations have enabled them to identify the locations of several live crypto ATMs. The officer also noted that the regulators issued cease and desist orders to the operators. The watchdogs also warned that breaches of the regulations would attract investigations under the money laundering rules.
Officer Brants noted that the Force Cyber Team are delighted to be working with the FCA in what they call the “first crypto enforcement action in West Yorkshire.” The UK authority is working with many law enforcement agencies, including local police forces, to disrupt and disable unregistered crypto-ATMs.
The report also suggested that the FCA previously wrote to all crypto-ATM operators and hosts, warning them of “imminent” consequences if they fail to register under the watchdog. The recent action by the FCA against cryptocurrency ATMs will affect many operators.
According to Coin ATM Radar, up to 28 locations offer these machines in the UK. The data shows that over 50% of crypto ATM locations are in London, with more near Birmingham, Manchester and Nottingham.
Regulators are increasing oversight of the crypto industry
The latest enforcement action against crypto ATMs in the UK is not the first the FCA has ever carried out. In March 2022, the watchdog issued a similar cease and desist order for Bitcoin ATMs. The FCA, in its order, asked all unregistered ATMs to shut down immediately or face further enforcement action.
The FCA’s recent enforcement action comes amid increased cryptocurrency regulations from global financial watchdogs around the world. Recently, a few cryptocurrency firms have faced multiple enforcement actions from US regulators.
For example, in a recent report, the New York Department of Financial Services (NYDFS) ordered Paxos stops minting and issues BUSD after some research.
Also Coinbase and Kraken faced enforcement actions by the NYDFS and the US Securities and Exchange Commission. In the reports, NYDFS went after the crypto exchange Coinbase, assert that the company failed to comply with anti-money laundering and know-your-customer (KYC) standards. As a result, the NY regulator demanded a $100 million fine from the crypto exchange.
Featured image from pexels, chart from TradingView.com
