The Financial Conduct Authority (FCA) has upped the ante in its pursuance of crypto ventures in the UK, telling operators of crypto ATMs in the UK to shut their machines down or face enforcement action.
The FCA has said that it will not tolerate crypto-asset exchange services managing ATMs in the UK, in its latest warning to financial institutions.
“Crypto ATMs offering crypto-asset exchange services in the UK must be registered with us and comply with UK Money Laundering Regulations (MLR),” the regulator said in a statement. “None of the crypto-asset firms registered with us have been approved to offer crypto ATM services, meaning that any of them operating in the UK are doing so illegally and consumers should not be using them.”
Crypto ATMs are a type of kiosk that allow consumers to purchase and sell crypto-assets while using a credit or debit card.
The idea has been around for a number of years, with the first example of one of these kiosks launching in Vancouver, Canada, in October 2013. Later the same year, Europe’s first was set up in Slovakia’s capital, Bratislava.
Data on crypto ATMs' actual presence in the UK is foggy; however, according to Coin ATM Radar, there are a total of 80 in the UK, with 50 of them in London.
Meanwhile, the website says that there are 1,026 of these ATMs across the EU, with the highest number in Spain, where there are 174. Austria and Poland also rank high.
In the UK, the Upper Tribunal, a court that is responsible for dealing with appeals cases, recently ruled against Gidiplus.
The firm had wanted to offer crypto ATM services, and to continue trading pending the Upper Tribunal’s decision on its appeal against the FCA refusing its application for registration under the Money Laundering Regulations 2017 (MLRs).
The judge concluded that there was a “lack of evidence as to how Gidiplus would undertake its business in a broadly compliant fashion”.
“We 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,” said the FCA.
Wider clamp down
Commenting on its latest warning to the industry, the regulator continued: “Since we 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.”
The FCA has recently been raising concerns about crypto-assets, in part due to the increase in interest that occurred in 2021, and due to the fact that they remain an unregulated product in the UK.
The regulator revealed earlier this month that it has opened more than 300 cases relating to possible crypto-asset businesses not registered with the FCA over a six-month period. This is part of wider action to tackle consumer harm from bogus investments.
Many of these may be scams, the watchdog has cautioned, while it also has 50 live investigations, including criminal probes, into unauthorised businesses.