The Financial Conduct Authority (FCA), the United Kingdom’s financial regulator, is coming for unregistered crypto ATMs. FCA has joined forces with the West Yorkshire Police to combat operators of cryptocurrency ATMs in the northern English city of Leeds. The cyber division of the West Yorkshire Police has found “several live crypto ATMs” without specifying their number or location.
FCA builds up an operational framework around crypto ATMs
The FCA announced the news on February 14th, emphasizing that no crypto ATM operators in the United Kingdom currency are registered with the FCA. According to the authority, all crypto exchange providers, including crypto ATM operators, must be registered with the FCA and follow UK money laundering legislation.
According to Mark Steward, executive director of enforcement for the FCA, unregistered crypto ATMs functioning in the United Kingdom are operating unlawfully. In addition, he stated that the regulator would continue to disrupt unregistered crypto enterprises in the country. In addition, the executive stated that crypto goods are currently unregulated and high-risk, advising investors to be prepared to lose their whole investment in cryptocurrencies.
According to police detective sergeant Lindsey Brants, local enforcement officials have sent multiple cease-and-desist letters to operators of cryptocurrency ATMs. However, he continued to state that any violation of money laundering legislation would result in an investigation.
According to statistics from Coin ATM Radar, there are at least 28 sites in the United Kingdom that offer Bitcoin ATMs. Therefore the FCA’s action against crypto ATMs would likely affect a substantial number of ATM operators. Furthermore, the data indicates that over fifty percent of these crypto ATMs are located in London, with additional installations around Birmingham, Manchester, and Nottingham.
The FCA’s new action against crypto ATMs in the United Kingdom is not it’s first. The same government released a similar announcement in March 2022 on the termination of Bitcoin ATMs in the country, urging ATM owners to “shut down or face further action.”
At the time of writing, the FCA had registered 41 crypto firms in the UK, including platforms like Gemini, Zodia Custody, Bitpanda, Revolut, and others.
Crypto ATMs tied to money laundering
Although there is technically no particular law prohibiting crypto ATMs in the United Kingdom, none have received FCA approval as of this writing. However, the potential linkages between crypto ATMs and organized crime have been noted around the world.
In a research to be published in 2020, the U.S. Drug Enforcement Administration (DEA) describes how it has observed crypto ATMs being used by multinational criminal groups to launder illegal drug money, in addition to more conventional techniques.
UK financial regulators circle around CBDCs
The United Kingdom Tax Reform Council has launched a campaign in opposition to the Bank of England’s proposal to implement a central bank digital currency (CBDC). The non-profit organization cautions that such a move might severely compromise the privacy of individuals and result in intrusive modifications to the taxation system.
John Chown, a monetary economist and co-founder of the Institute for Fiscal Studies, serves as an advisor to the Tax Reform Council. The Tax Reform Council thinks that introducing a CBDC will enhance government surveillance, tax authorities’ infiltration, and the possibility of cyberattacks on the nation’s monetary system.
According to the advisory board economists, including Patrick Minford, Julian Jessop, and Chown, “the Bank of England’s decision to pursue a British CBDC raises a number of very real concerns.” The organization’s goal is to raise awareness about the “greater government surveillance” that CBDCs may provide.
CBDCs assert that they provide more financial inclusion, lower prices for businesses and consumers, and enhanced security. However, Bitcoin already provides these benefits and more: El Salvador banked a large portion of its people by enacting the Bitcoin law, and Bitcoin also provides an escape route for those living under oppressive governments.
The Treasury and the Bank of England have been recruiting for CBDC positions in the United Kingdom. Despite opposition from the wider crypto community, the Bank of England has emphasized the “need” for a digital version of the British pound.
According to the Tax Reform Council, every CBDC transaction would be recorded on the Bank of England’s secret blockchain ledger, providing the taxman unprecedented access to individuals’ financial histories. According to the news release, this is already happening in China with the renminbi CBDC.