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UK regulator orders crypto ATM operators to shut down

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The UK’s Financial Conduct Authority (FCA) has contacted crypto ATM operators to shut down their machines or face penalties since they are unlicensed.

According to an FCA notice published on Friday, none of the crypto ATM operators in the UK are registered to do business in the country. As such, all such machines are operating illegally.

There are 81 crypto ATMs in the UK, according to data from CoinATMRadar, with the majority located in the London Area. Manchester, Oxford and Birmingham also host a few machines.

The FCA’s notice comes on the heels of a court ruling against Gidiplus, a crypto ATM operator in the UK. Gidiplus previously lodged an appeal with the Upper Tribunal challenging the FCA’s decision to reject its licensing application under the Money Laundering Regulations (MLR) regime.

At the time, the FCA rejected the Gidiplus application due to insufficient identity verification for customers doing small transactions. The FCA stated that Gidiplus’s identity verification for people doing transactions below 250 British pounds ($327) opened to door to “smurfing” risks.

Smurfing is a technique allegedly used by money launderers where large sums of money are deposited in smaller amounts to evade detection from the authorities. Ruling on the matter, the court stated that Gidiplus had failed to prove that it could operate in a manner compliant with MLR protocols.

Since assuming its role as the crypto money laundering overseer in 2020, the FCA has moved to tighten cryptocurrency regulations in the UK. Earlier in March, the regulator stated that it had investigated over 300 crypto businesses in the last year.

Singapore made a similar move to shutter crypto ATMs earlier this year as part of a wider crackdown on digital currency marketing.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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