The Financial Conduct Authority (FCA) has been active in identifying and disrupting illegal crypto ATMs across the UK. Since the start of 2023, the regulatory body has inspected 34 locations suspected of hosting these machines. The operation, conducted in conjunction with other law enforcement agencies, has disrupted 26 illicitly operating machines.
FCA's Regulatory Action against Unregistered Crypto ATMs
The FCA, in collaboration with various police units, conducted inspections at 18 suspected sites across the UK in May and June. One such inspection in Sheffield led to the removal of a crypto ATM after a member of the public lost £1,000 in a failed transaction. The machine's operator could not be contacted to resolve the matter.
In recent years, the popularity of cryptocurrency ATMs has surged as more and more people utilize them for purchasing and selling digital currencies like Bitcoin andEthereum. Nevertheless, the FCA cautions that unregistered operators might lack the essential measures to prevent illicit activities, such as money laundering.
Steve Smart, the Joint Executive Director of Enforcement and Market Oversight at the FCA, issued a strong warning against the use of unregistered crypto ATMs: "If you use a crypto ATM in the UK, you are using a machine that is operating illegally and you may be handing your money over to criminals."
He also emphasized that users of these machines are not protected and could lose their money, often with no effective communication channels to resolve any problems with the machine's operator. "We will continue to warn the public and take appropriate enforcement action against unregistered crypto ATM operators," Smart concluded.
This crackdown follows the FCA's previous inspection of sites across the UK suspected of hosting unregistered crypto ATMs. The FCA continues to warn consumers that crypto assets are unregulated and high-risk. In the UK, crypto asset exchange providers, including operators of crypto ATMs, must be registered with the FCA and comply with the UK Money Laundering Regulations. Non-compliance may result in criminal charges of up to two years in prison, a fine, or both.
In the past, the FCA has inspected locations in many parts of England, reporting that it has successfully blocked the operation of illegal devices in Leeds, Exeter,East London, Nottingham and Sheffield.
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— Financial Conduct Authority (@TheFCA) July 10, 2023
FCA at the Forefront of Crypto Regulation
In addition to identifying unregistered and potentially dangerous businesses, the British regulator is proactively working to increase the security of digital asset adoption. Last week, it was announced that the Financial Services and Markets Bill had received Royal Assent. This is the final stage at which it becomes legal as a new Act. This is significant because it includes cryptocurrenciesand stablecoins within its scope. Crypto is now considered a regulated financial activity.
"The Act is central to the Government's vision to grow the economy and create an open, sustainable, and technologically advanced financial services sector," the UK government commented in an official statement.
11. Promotes the use of new technology in financial services, enabling the regulation of cryptoassets to support safe adoption, and establishing ‘sandboxes’ that can facilitate the use of new technologies such as blockchain in financial markets.
— Andrew Griffith MP (@griffitha) June 29, 2023
In a separate regulatory move, the FCA is finalizing regulations around cryptocurrency marketing and advertising in the country, which are set to take effect on 8 October. These proposed rules were reported as the number of crypto holders in the UK has more than doubled in the past year.
The cryptocurrency exchange, Binance apparently does not want to take part in these changes. Its UK subsidiary, Binance Markets Limited, has decided to waive its local license. This is part of the company's broader strategy to reduce its European presence. Binance also gave up licenses in Cyprus and the Netherlands.
This article was written by Damian Chmiel at www.financemagnates.com.
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