UK Financial watchdog shuts down crypto ATMs and awaits March 31 deadline for crypto companies to comply with tough AML requirements

The UK financial watchdog, the FCA, has warned operators of crypto ATMs to shut down their machines or face enforcement action. The FCA is also ready to reject any crypto companies operating in the UK if they cannot meet high AML standards when the deadline for doing so ends at the end of March.

The UK’s Financial Conduct Authority (FCA) has ordered the immediate shut-down of all crypto ATMs in the UK, citing that all such machines needed to be registered with the FCA, and that none of those that had already registered had been approved to offer crypto ATM services.

The FCA published a news briefing on the situation earlier today, and warned that any ATMs currently operating in the UK were doing so illegally, and that consumers should not be using them.

The briefing highlighted the case of crypto ATM operator Gidiplus, whereby the operator had appealed to continue trading until the Upper Tribunal reached a decision on the company’s registration under money laundering regulations. 

However, the judge said that there was:

“lack of evidence as to how Gidiplus would undertake its business in a broadly compliant fashion.”

On another front, the FCA has been notifying some crypto companies that are registered on its temporary anti-money laundering register, that they are likely to be “rejected”.

There are only 3 weeks to go before the deadline on 31 March, at which date crypto companies have the choice of winding down their operations in the UK, or undergoing very strict compliance requirements and ultimately also facing outright rejection.

In a recent article by The Block, it was noted that BSC2 Ltd., one of crypto’s biggest market makers had decided to withdraw from the temporary register. A spokesperson for the company stated the following:

“We are committed to ensuring this move causes as little disruption as possible and are working closely with our clients to ensure they continue to have a seamless trading experience with us,”

They added:

“Delivering on this objective includes meaningful dialogue with regulators and strict compliance with the regulatory framework in the jurisdictions where we operate.”

With crypto companies of the likes of Revolut and Copper also on the temporary register, the UK could be losing a sizable chunk of the crypto market, should these companies also decide that the AML requirements imposed by the FCA are just too stringent.

It may well be that the FCA feels that it is just doing its job, and that failure to comply with regulations will mean that these crypto companies will need to move overseas.

However, given the sheer size of the crypto sector now, and its growing importance in global finance, the UK government will perhaps need to think very carefully before kicking crypto out of the country, and cutting the UK off from a potentially huge alternative financial market.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.