All Crypto ATM Firms in UK Are Illegal, Says FCA

It hasn’t been up to two months since Elliptic, a blockchain analytics firm, published a report detailing its prediction for crypto regulations this year. The firm said 2023 would see increased sanctions in the crypto space as global regulators would tighten regulation in the industry. 

Elliptics reports have already started unfolding as regulators engage in a spree of enforcement actions across the globe. For example, a recent report revealed the Financial Conduct Authority (FCA) took action against unregistered crypto ATM operators in the United Kingdom (UK).

FCA Issues Cease Order To Illegal Crypto ATM Operators

According to the FCA’s report, the UK watchdog investigated several sites in Leeds where it suspects illegal cryptocurrency ATM operations. The FCA, in collaboration with West Yorkshire Police’s Digital Intelligence and its Investigation 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 would 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 money laundering rules. He added that crypto products are “high-risk asses” and “lack regulatory oversight.” So anyone investing in them could incur losses, per the government official. 

Deputy Sergeant Lindsey Brants of the Force Cyber Team at West Yorkshire Police also commented. According to Brants, the recent investigations have allowed 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 a breach of regulations would attract investigations under the money-laundering rules. 

Officer Brants noted that the Force Cyber Team are happy for their partnership 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. 

Also, the report suggested that the FCA previously wrote to all crypto ATM operators and hosts, warning them about “impending” consequences should they fail to register under the watchdog. The recent action by the FCA against cryptocurrency ATMs would affect many operators.

According to Coin ATM Radar, up to 28 locations provide these machines in the UK. The data shows that over 50% of the crypto ATM locations are in London, with more near Birmingham, Manchester, and Nottingham.

Regulators Increase Oversight On The Crypto Industry

The latest enforcement action against crypto ATMs in the United Kingdom is not the first the FCA has ever conducted. In March 2022, the watchdog issued a similar cease-and-desist order for Bitcoin ATMs. The FCA, in its order, asked all non-registered ATMs to shut down immediately or face additional enforcement actions. 

The recent FCA’s enforcement action comes amid heightened cryptocurrency regulations by global financial watchdogs across the globe. Recently, a few cryptocurrency firms faced several enforcement actions from US regulators.

For example, in a recent report, the New York Department of Financial Services (NYDFS) ordered Paxos to quit minting and issuing its BUSD after some investigations. 

Also, Coinbase and Kraken faced enforcement actions from the NYDFS and US Securities and Exchange Commission. In the reports, the NYDFS went after crypto exchange Coinbase, alleging 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