Reuters reports that the UK’s Financial Conduct Authority (FCA) has cracked down on crypto ATMs in the country and has moved to the East London area with an investigation.
The FCA is working with the Police Force from West Yorkshire to deal with unregistered ATM facilities in Leeds. FCA said it had collected evidence from “a number of locations” in the area for further investigation and may take legal action, according to Reuters.
The FSA is now working with the Metropolitan Police to focus on illegal ATM operations in east London. The operations are carried out under Anti-Money Laundering (AML) regulations, which allow police to enter premises without a warrant, monitor procedures and request information or documents.
FCA on crypto ATMs
Crypto ATMs gained popularity in 2020 and 2021 on a global scale. The UK was very unwelcome of these ATMs even before they became popular.
In 2019, the UK issued a notice and introduced all crypto ATMs and exchanges in compliance with current AML requirements. These anti-money laundering requirements require the transmission of a Know Your Customer (KYC) process and the collection of usernames, official IDs, dates of birth, and residential addresses that crypto ATMs do not comply with.
With the notification, the FCA required all ATMs and crypto exchanges to meet anti-money laundering requirements and to register with the FCA. In 2022, no crypto ATMs were registered with the Financial Conduct Authority (FCA) when the agency published a second warning. The warning reminded of anti-money laundering and registration requirements and stated:
“We are concerned about crypto ATMs operating in the UK and will therefore contact the operators to advise them to shut down the machines or face further action.”
Cryptocurrency ATMs in the UK
According to Reuters, there are currently 19 cryptocurrency ATMs in the country, none of which are registered with the FCA. That number was 270 in 2020, shortly after the Financial Conduct Authority (FCA) published its first note.
Commenting on the significant drop in the number of ATMs, an analyst at crypto brokerage Globalblock told Reuters:
They are very likely to be under the radar. But there is also an element of fear and uncertainty about what the FCA will do next.”
Some crypto ATM services have attempted to register with the FCA since 2019. An example is Gidiplus, which applied for registration in June 2022.
Although Gidiplus complied with all KYC and AML requirements, the FCA denied the company’s registration application stating that there were:
“Lack of evidence of how Gidiplus conducted its business in a broadly consistent manner … the risk that the applicant’s business could be used for money laundering or terrorist financing.”