UK Law Enforcement and Regulators Join Forces to Dismantle Illegal Crypto ATMs
UK authorities have raided several properties around Leeds suspected of hosting illegally operated cryptocurrency automatic teller machines (ATMs).
The UK’s Financial Conduct Authority (FCA), as well as West Yorkshire Police’s Digital Intelligence Unit, were involved in the raids, which are believed to be part of the UK’s first crackdown on illegal crypto ATMs, according to an announcement by the FCA.
The watchdog claimed that no crypto ATM operators in the UK currently have FCA registration. It said that the agency had previously written to all operators warning of the legal consequences of failing to register with the FCA.
“The FCA is working with multiple law enforcement partners, including local police forces, to disrupt and disable illegal Crypto ATMs,” the agency said, adding that it will review evidence gathered during these visits and consider further potential enforcement action.
Crypto ATMs allow customers to buy or convert traditional currencies into cryptoassets. According to data by Coin ATM Radar, there are 27 bitcoin ATMs installed across the whole of the U.K.
“Unregistered crypto ATMs operating in the U.K. are doing so illegally,” FCA’s executive director of enforcement Mark Steward said, adding that the regulator will continue to disrupt unregistered crypto businesses in the country.
DS Lindsey Brants of the cyber team at West Yorkshire police said they had issued warning letters to crypto ATM operators, requesting the operators cease and desist from using the machines.
“We will continue to identify and disrupt unregistered crypto businesses operating in the UK,” Mark Steward, the FCA’s director in charge of enforcement and market oversight, said.
“Crypto businesses operating in the UK need to be registered with the FCA for anti-money laundering purposes. However, crypto products themselves are currently unregulated and high-risk, and you should be prepared to lose all your money if you invest in them.”
The move comes just days after the FCA announced that all crypto firms marketing to UK consumers, including firms based overseas, will soon need to comply with the new UK financial promotions regime.
The agency threatened that breaches can result in up to 2 years imprisonment. “Firms must start preparing now for this regime. We will take robust action against firms breaching these requirements,” the regulator stated.
Notably, data from the UK police unit Action Fraud showed that cryptocurrency fraud in the UK increased by 32% to £226 million ($273 million) in one year.
“Whenever times are tough, fraudsters always seek to prey on less experienced investors by promising huge returns,” Hinesh Shah, a forensic accountant at Pinsent Masons, was quoted as saying.