The Financial Conduct Authority (FCA) of the United Kingdom has launched a major crackdown on illegal cryptocurrency ATM machines in a bid to tackle illicit activities in the crypto space.
Quick facts:
- UK FCA cracks down on illegal crypto ATMs, taking action against 26 out of 34 machines.
- Users warned of scams and lack of protection for crypto ATM transactions.
- Investigations were conducted to enforce compliance with registration and regulations.
- Recent legislation includes cryptocurrencies in regulated financial activities, ensuring security and oversight.
The crackdown follows the FCA’s ultimatum issued on February 14, which required all crypto ATM operators in the UK to either comply with regulations or cease their illegal operations.
As part of a coordinated effort with law enforcement agencies, the FCA has taken action against 26 out of 34 crypto ATMs since the beginning of 2023.
To enforce compliance, the FCA utilized its powers under the Money Laundering Regulations 2017 and conducted investigations into 36 crypto ATM locations.
Steve Smart, the joint executive director of enforcement and market oversight at the FCA, has raised concerns about the use of crypto ATMs, emphasizing that they are operating illegally in the UK.
Users of these machines are at risk of falling victim to criminals, as the government and ATM operators do not provide protection for scams involving crypto or Bitcoin ATMs.
During the investigation, 18 crypto ATM locations were inspected between May and June, coinciding with the FCA’s announcement of the inspection drive.
The FCA’s primary objective is to ensure that all crypto exchanges and ATMs operating in the UK are registered with the FCA and comply with the Money Laundering Regulations.
FCA Warns Users of Illegal Crypto ATMs
The need for this crackdown was highlighted by a recent crypto scam reported by the Clive Police Department, where an impersonator posing as a law enforcement official fraudulently obtained $6,000 from an unsuspecting victim.
Scammers often use fear tactics and impersonate law enforcement officials to deceive individuals into making transfers through crypto ATMs.
It is important for individuals to be vigilant and cautious when dealing with unfamiliar or suspicious requests, especially in the crypto space. Legitimate law enforcement agencies never demand payment over the phone or through cryptocurrency.
The FCA’s crackdown on illegal crypto ATMs demonstrates its commitment to maintaining the integrity of the financial system and safeguarding consumers from potential risks associated with unregulated crypto activities.
U.K. Leading the Way in Cryptocurrency Regulation
The UK regulator is actively addressing both unregistered businesses and the security of digital asset adoption. Recently, the Financial Services and Markets Bill achieved Royal Assent, marking a crucial milestone as it becomes a new Act.
Notably, this legislation encompasses cryptocurrencies and stablecoins, bringing them under regulatory oversight. With this development, crypto activities are now considered regulated financial activities in the UK.
In an official statement, the UK government emphasized the Act’s significance in their vision to cultivate economic growth and establish a technologically advanced and sustainable financial services sector.
This demonstrates the government’s commitment to fostering a favorable environment for the digital asset industry while ensuring proper regulations and safeguards are in place. The Act aims to promote the growth of the economy while maintaining the integrity and security of the financial system.
