The United Kingdom’s Financial Conduct Authority (FCA) is taking a jab against the illegal crypto ATMs in the country. On May 5, 2023, the FCA announced coordinating with the local authorities to inspect sites “suspected of hosting illegally operated crypto ATMs.”
Crypto ATM facilities in Exeter, Nottingham, and Sheffield were probed concerning operating unregistered cryptocurrency ATMs. The inspection is believed to be a joint operation between the FCA, the South West Regional Organised Crime Unit, Yorkshire, Humber Regional Organized Crime Unit, and the Nottinghamshire Police Force.
Authorities performed similar actions in March 2023 in East London and Leeds in February 2023. During this, the FCA issued warnings or cease-and-desist requests to suspected crypto operators. It should be noted that, against the rule, no crypto ATM operator is registered with the financial watchdog of Great Britain.
Therese Chambers, executive director of enforcement and market oversight of FCA, said that the actions taken now and in the past few months show our commitment to act and stop illegal activities. These recent actions by the authorities raised general awareness among citizens regarding the illegally operated crypto ATMs and disrupted the unregistered crypto businesses.
In doing so, the FCA authorities executed the powers under the U.K.’s Money Laundering Regulations from 2017. Also, they are planning to review the gathered pieces of evidence and might consider if there is a requirement for further action.
As per the data from CoinATMRadar, 15 crypto ATMs were probed, including the operators BigSea Coins, B.D. ATMs, Crypto bitcoin, and Computer House. U.K.’s financial watchdog argue that all crypto ATMs are illegal as none is registered with the FCA. In February 2023, the FCA and Cyber team at West Yorkshire Police took multiple actions against illegally operated crypto ATMs in and around Leech City.
Crypto ATMs are stand-alone electronic kiosks allowing users to buy and sell cryptocurrencies in exchange for cash or debit cards. All crypto ATMs offer services for Bitcoin, while some facilitate transactions in other cryptocurrencies. These ATMs do not connect to traditional bank accounts but are connected to users’ digital wallets.
Most crypto ATMs offer one-way transactions, meaning users can only buy crypto from them. Some advanced machines also provide the facility to sell cryptocurrencies. Interestingly, the top 10 cryptocurrency ATM operators run 28,826 machines, 69.3% of total operating devices. The remaining 591 operators run 11,859 machines, of the remaining 30.7%.
However, certain risks are associated with using crypto ATMs, like higher fees; some charge around 10% per transaction, whereas the average fee is usually between 1% to 4%. Generally, keeping funds in exchange comes with insurance against theft, but crypto ATMs require keeping funds in custodial wallets, which are not insured.
A specific transaction limit is associated with crypto ATMs; usually, it is between $10 minimum to a maximum of $10,000 per day or transaction. Another area for improvement is where to locate one, many apps are available for finding an ATM, but still, the network of these machines could be better.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/05/06/u-k-s-fca-probes-illegal-crypto-atms-operating-in-the-country/