On Friday 11th March, the British financial watchdog FCA declared all bitcoin ATMs illegal and ordered them to shut down. FCA efforts have been triggered by the lack of proper checks for small-sized deposits. According to the FCA, the ATMs may be breeding money laundering activities. It’s not the first time the FCA has frustrated crypto investors and companies.
Earlier yesterday, The Financial Conduct Authority(FCA) ordered all UK-based bitcoin ATMs to shut down immediately. The FCA is the financial watchdog in the UK and deals with protecting citizens’ financial security.
Bitcoin ATMs are points where investors can deposit cash and receive bitcoin in their wallets in return. According to a source, about 81 functional bitcoin ATMs are in the country.
The FCA statement reads,
“We are concerned about crypto ATM machines operating in the UK and will therefore be contacting the operators instructing that the machines be shut down or face further action.”
The FCA noted that not one crypto company had been licensed to supply Bitcoin ATMs. Hence, they termed every ATM operational within the country as working illegally, and consumers should not use them.
Most of these bitcoin ATMs operate in supermarkets and convenience stores. Currently, each Bitcoin ATM is run by about eight operators who the FCA does not license. The FCA has written a statement to host supermarkets and stores to ensure the bitcoin ATMs illegal and shut down immediately. According to the release, anyone who continues to operate the ATMs will face legal actions.
As the body tasked with regulating the country’s financial activities, FCA has been in fights with crypto companies on several occasions. Currently, the FCA targets Bitcoin ATMs illegal, because they have minimal checks for persons depositing small sums.
Before banning the ATMs, the FCA raised concerns that these tools could be used for illegal money fraud. Infact, the FCA even had a court case before call all Bitcoin ARMs illegal against Gidiplus, a crypto ATM firm where the upper tribunal ruled against the latter.
According to the regulator, Gidiplus’ had weaker ID checks for persons depositing less the £250. FCA noted the danger of many people depositing massive numbers of small-sized transactions to avoid detection. Such activities could lead to cash laundering since many small-sized transactions can remain undetected.
The small sums form large chunks translating into cash laundering. Hence, the regulators refused to license Gidiplus. The court ruled against Gidiplus, mentioning that there is no evidence of complying with regulations.
Earlier this year, The FCA announced that all crypto exchanges must be registered. According to their recent resorts, very few exchanges, 33, have been registered. In mid-2021, the FCA issued a consumer warning on Binance markets limited and Binance group products.
In their statement, FCA reiterates that they often warn consumers of the dangers of the unregulated high-risk crypto markets. Due to increased regulatory issues, several large crypto companies like Bitpanda and Celcius had to move their headquarters from the UK to the US. While the FCA insists they protect consumers, they are frustrating many top crypto service providers.
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