The Financial Conduct Authority (FCA) of Britain has ordered that all Bitcoin cashpoints in the country be shut down. ATM providers recently received an order from the watchdog to cease operations, or risk facing enforcement action.
Weeding Out Money Laundering
Bitcoin ATMs allow holders of cash to independently convert their cash into Bitcoin, or vice versa. Given that cash transactions are private, the proliferation of these machines has raised concerns that they could help facilitate crypto money laundering.
In particular, they provide an off-ramp from the highly traceable Bitcoin blockchain that’s helped track down criminal transactions in the past. According to Coin ATM Radar, there are currently just 80 Bitcoin ATMs running across the UK, compared to over 32,000 in the United States. Canada – home of the very first ATM – comes in a distant second with about 2300 ATMs.
Most machines in Britain are situated in supermarkets and convenience stores, to which the FCA has also issued notice. The authority states that it has granted no license to any of the ATMs’ operators, and is concerned that they don’t provide sufficient background checks that online exchanges are typically compelled to.
“Crypto ATMs offering crypto asset exchange services in the UK must be registered with us and comply with UK money laundering regulations,” said the FCA. “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.”
Companies found operating these machines illegally may be liable for fines and criminal prosecutions while being prevented from other forms of financial business.
The Worldwide Crypto Crackdown
From protests to sanctions, world governments are hurrying to bring crypto transactions under regulatory control. Some fear that Russia may start using crypto to bypass Western trade restrictions after being cut off from SWIFT.
It’s not a perfect solution for criminals, however. Though crypto transactions are natively pseudonymous, a government can arguably trace them better than dollars as long as they can link a given blockchain address to someone’s identity.
Data reflects this sobering reality: Chainalysis finds that the criminal share of crypto transactions is getting far smaller over time. The same firm also released a tool recently that helps track the funds of sanctioned individuals, making crypto even less private.