UK’s Financial Conduct Authority (FCA) said on Friday that all crypto ATMs operating in the country were doing so illegally, and ordered operators to immediately shut them down.
Britain’s top financial regulator said operators needed to comply with UK money laundering regulations, and that none had done so. The regulator said the ATMs, which allow users to convert crypto into fiat and vice-versa, had minimal checks, and could be used as a tool for money laundering.
Specifically, the regulator criticized the lack of know your customer (KYC) requirements for small transactions.
According to data from coinatmradar, there are about 70 crypto ATMs currently operating in the United Kingdom.
The FCA has always maintained a conservative approach towards cryptocurrencies. Recently, the body said it had opened more than 300 cases regarding crypto assets between April and September 2021. It has 50 live investigations, including criminal probes, into unauthorized crypto businesses.
Earlier this year, it had also outlined stringent restrictions on advertisements for crypto products. In its announcement on Friday, the regulator said it continued to warn consumers about the unregulated and high-risk nature of crypto.
We regularly warn consumers that cryptoassets are unregulated and high-risk which means people are very unlikely to have any protection if things go wrong, so people should be prepared to lose all their money if they choose to invest in them.
Crypto ATMs a gray area
Given their ability to easily and anonymously convert crypto into fiat, crypto ATMs have faced a large amount of regulatory scrutiny since their inception. In the United States, all ATM providers are required to have an effective written anti-money laundering program in their machines.
The United States has the highest number of crypto ATMs in the world, at more than 30,000 locations.
Earlier this year, crypto hub Singapore outlawed crypto ATMs as it adopted a tougher stance protecting investors from crypto-related scams and volatility. Specifically, the Monetary Authority of Singapore said ATMs could lead the public to buy crypto without considering the risk, and leave them exposed to the high amount of volatility in the market.
But El Salvador, which legalized Bitcoin last year, has widely adopted Bitcoin ATMs. The country has machines at more than 200 locations.