UK finance regulator warns against illegal crypto ATMs

Cryptoasset firms are being warmed to shut them down or face further action.
Written by Aimee Chanthadavong, Contributor

Britain's Financial Conduct Authority (FCA) has warned operators of crypto ATMs in the UK to shut down their machines or face enforcement actions.

Crypto asset firms are required to be registered with the FCA and comply with the UK Money Laundering Regulations (MLRs) if they want to operate crypto ATMs in the UK.

However, according to the regulator, none of the cryptoasset firms have registered to be approved to offer crypto ATM services, and therefore are operating illegally.

"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 said.

The FCA said since it published a list of unregistered crypto firms that may have been continuing to conduct business, 110 of them have stopped operating. At the time of writing, there are 244 cryptoasset firms in the UK that are listed as unregistered.

"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," the FCA warned.

Last month, the Upper Tribunal ruled against Gidiplus, a firm offering crypto ATM services that wanted to continue trading, after it appealed the FCA's decision to refuse its application to be registered as a cryptoasset exchange provider under the MLRs.

Judge Timothy Herrington concluded there was a "lack of evidence" as to how Gidiplus would undertake its business in a "broadly compliant fashion".

The ruling echoed FCA's initial decision to refuse to register Gidiplus as a cryptoasset business. It believed the company did not meet the requirements of the MLRs, noting it had "particular concerns in respect of Gidiplus' business-wide and customer risk assessments, customer due diligence, enhanced due diligence and transaction monitoring".

The FCA also alleged Gidiplus co-owner Olumide Osunkoya could not demonstrate that he had "adequate knowledge, skills and experience in respect of Gidiplus' obligations under the MLRs".

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