US Agency Calls For Stricter Regulation Of Crypto ATMs

Source: AdobeStock / Aleksej

 

As the spread of cryptocurrency ATMs is accelerating, a recently released report by the US Government Accountability Office (GAO) claims the devices are widely used to facilitate payments for criminal acts such as human trafficking and drug sales. With this in mind, the report calls for reinforcing the oversight of crypto kiosks.

In its recommendations, the government agency says it proposes that The Financial Crimes Enforcement Network (FinCEN) and the Internal Revenue Service (IRS) review cryptocurrency kiosk registration requirements. Both institutions concur with the GAO’s proposal, according to the report.

“While kiosk operators are required to register with FinCEN, they are not required to routinely report the specific locations of their kiosks. This limits federal agencies’ ability to identify kiosks in areas that have been designated as high risk for financial crimes and could involve human and drug trafficking,” the agency said.

The GAO argues that reviewing registration reporting requirements and taking needed and appropriate action to better identify the locations of individual kiosks could help FinCEN and IRS identify high-risk kiosk operators to monitor for compliance, as well as to improve information law enforcement has available to identify potentially illicit transactions.

Data provided by kiosk crowdsourcing website Coinatmradar.com suggests that the past year has brought a major increase in the number of crypto ATMs across the world. Between January 1, 2021, and January 1, 2022, the number of such devices grew from 14,040 to 34,169 worldwide. Of these, some 29,963 crypto ATMs have been installed in the US.

To justify its call for stricter regulations of crypto kiosks, the GAO cited a July 2020 study by social justice movement Polaris Project, which suggested that cryptocurrencies are “the second-most commonly accepted payment method on 40 platforms in the online commercial sex market.”

The agency’s report also referred to the findings of the US Department of Justice (DOJ) according to which crypto “is increasingly used to buy and sell illegal drugs on Dark Web marketplaces and by drug cartels to launder their profits.”

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