In early March of 2022 the UK’s Financial Conduct Authority (FCA) released warning on illegal crypto ATMs operating in the UK – but why?
FCA shut down all the UK’s crypto ATMs
In the warning the FCA noted that crypto ATMs offering cryptoasset exchange services in the UK must be registered with the FCA and comply with UK Money Laundering Regulations (MLR).
None of the cryptoasset firms registered with the FCA had, at that point, been approved to offer crypto ATM services, meaning that any of them operating in the UK were doing so illegally and consumers should not be using them.
The Upper Tribunal recently ruled against Gidiplus, a firm offering crypto ATM services, which wanted to continue trading, pending the Upper Tribunal’s determination of its appeal against us refusing its application for registration under the MLRs.
The judge concluded that there was a ‘lack of evidence as to how Gidiplus would undertake its business in a broadly compliant fashion’.
The FCA noted that they “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.”
Since the FCA published the list of unregistered crypto firms that may have been continuing to conduct business, a recent assessment found that 110 are no longer operational.
“We regularly warn consumers that cryptoassets are unregulated and high-risk which means people are very unlikely to have any protection if things go wrong, so people should be prepared to lose all their money if they choose to invest in them,” the warning concluded.
As of March 7, 106 firms have applied for registration with the FCA to offer crypto services. Of those, 27 are now fully registered with 56 refused or having withdrawn their application.
The remaining 23 form the FCA’s Temporary Registration Regime (TRR), which allows them to continue to operate while their applications remain under assessment. The deadline for their application approval was March 31.
Unlike a normal ATMs where people can draw money from their bank account, crypto ATMs allow customers to buy and exchange cryptocurrencies using cash.
Users deposit their cash and the machine converts it into crypto and sends the funds to the person’s crypto wallet.
There are now close to 34,000 crypto ATMs available globally, most of them in the US.
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