Bitcoin ATMs used to finance illicit activities, says CipherTrace

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In its latest report, CipherTrace has stated that most Bitcoin ATMs are used for illegal activities. In what could turn out to be a bad omen for Bitcoin ATMs, the report mentions how cryptocurrencies are linked to illicit trade activities. These are being used to provide cover to such businesses.

In the last few years, Bitcoin ATMs have popped up in every corner of the globe. World wide, approximately 8,300 machines are dispensing BTCs to the general populace. They have helped cryptocurrencies achieve mainstream status and promote its use in the shopping and retail sector. Crypto ATMs are a great way to buy Bitcoin or transfer funds in various crypto denominations.

Now, a CipherTrace report states that such ATMs have become a portal to finance illegal activities. It adds that many such Bitcoin ATMs help route money towards high-risk exchanges, which are further connected to money laundering.

Bitcoin ATMs acting as intermediaries in illegal operations

As per the CipherTrace report, the amount of money routed towards high-risk exchanges through these machines has increased exponentially. Since 2017, this amount has doubled every year. In 2017, merely 2 percent of the funds designated for these machines were being siphoned off. This figure has ballooned to touch 8 percent figure in 2020. A four-fold jump in the statistics in just 36 months represents a considerable risk to the crypto sector.

Additionally, a significant portion of money stored in these Bitcoin ATMs – approximately 88 percent – remains in foreign offshore accounts.

Will regulatory authorities target Bitcoin ATMs

As per Coin ATM Radar, the world today has around 8,300 crypto ATMs. In just one year, the number of machines has grown from mere 5,000 to the current 8,300 figure, representing a whopping 60 percent rise. The rate of installation has also seen steady growth in the past few months.

However, with increasing money laundering activities being linked to these machines, they may soon land on the radar of regulatory authorities. Coinsource, one of the largest crypto ATM operators, says that their machines are compliant with ‘Know Your Customer’ guidelines. The chief operating officer of Coinsource, Sheffield Clark, says that compliance remains their top priority and they follow all the ‘anti-money laundering’ and ‘know your customer’ guidelines.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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