Bitcoin News - CryptoNewOne News

UK FCA tightens control on unregistered crypto ATMs

The United Kingdom Financial Conduct Authority(FCA) cracked down on crypto ATMs in the country and moved on to the east London region with the investigation, Reuters reported.

The FCA has been working with the police force from West Yorkshire to deal with the unregistered ATM installations in the city of Leeds. The FCA said it gathered evidence from “a number of sites” in the region for further investigation and might take legal action, according to Reuters.

The financial watchdog is now working with the Metropolitan Police to focus on illegal crypto ATM operations in east London. The operations are conducted under anti-money laundering (AML) regulations, which allow the police to enter premises without a warrant, observe procedures and request information or documents.

The FCA on Crypto ATMs

Crypto ATMs gained popularity in 2020 and 2021 on a global scale. The UK has been very unwelcoming of these ATMs even before they gained popularity.

In 2019, the UK released a notice and submitted all crypto ATMs and exchanges under the existing AML  requirements. These AML requirements call for conveying a thorough know-your-customer (KYC) process and collecting users’ names, official IDs, dates of birth, and residential addresses, with which crypto ATMs fail to comply.

With the notice, the FCA requested all crypto ATMs and exchanges to fulfill the AML requirements and register with the FCA. In 2022, no crypto ATMs were registered with the FCA when the watchdog published a second warning. The warning reminded the AML and registration requirements and stated:

“We are concerned about crypto ATM machines operating in the UK and will therefore be contacting the operators instructing that the machines be shut down or face further action.”

Crypto ATMs in the UK

According to Reuters, there are currently 19 crypto ATMs in the country, and none are registered with the FCA. This number was 270 in 2020, shortly after the FCA published the first warrant.

Commenting on the significant decline in the number of ATMs, an analyst at crypto brokerage Globalblock told Reuters:

“It is very possible that they are going under the radar. But there is also definitely an element of fear and uncertainty about what the FCA is going to do next.”

Some crypto ATM services have tried to register with the FCA since 2019. One such example is Gidiplus, which applied for registration in June 2022.

Even though Gidiplus complied with all the KYC and AML requirements, the FCA rejected the company’s registration request by stating that there was a:

“lack of evidence as to how Gidiplus would undertake its business in a broadly compliant fashion…The risk that the applicant’s business may be used for money laundering or terrorist financing.”

Posted In: , Regulation

Source link