According to the letter made public by Britain's Financial Conduct Authority (FCA), Bitcoin and other cryptocurrency ATMs that enable individuals to purchase and trade crypto were banned on March 10, 2022, in the UK.
Why Did the Financial Conduct Authority (FCA) Ban Bitcoin ATMs?
Bitcoin ATMs allow money holders to change their cash into Bitcoin or vice versa independently. Because money transactions are private, the development of these machines has sparked concerns that they may aid in the facilitation of cryptocurrency laundering.
In essence, they provide an exit point from the incredibly traceable Bitcoin blockchain, which has previously assisted in detecting illegal transactions. According to Coin ATM Radar, there are now just 80 Bitcoin ATMs operational in the United Kingdom, compared to over 32,000 in the United States. Canada, the birthplace of the ATM, is a distant second with around 2300 ATMs.
The majority of machines in the UK are found in supermarkets and convenience stores, for which the FCA has also given notice. The government claims that it has not issued a license to any of the ATM operators and is concerned that they do not conduct proper background checks, which are sometimes required for online transactions.
Companies detected unlawfully using these machines may face penalties and criminal charges, as well as being barred from engaging in other sorts of financial industries.
The Global Cryptocurrency Crackdown
From sanctions to penalties, international governments are rushing to bring crypto transactions under regulatory control. Some are concerned that Russia would start using cryptocurrency to circumvent Western trade restrictions after being cut off from SWIFT.
Nonetheless, it is not an excellent solution for crooks. Though crypto transactions are inherently pseudonymous, a government may potentially flag them higher than cash so long as they can connect a specific blockchain address to someone's id.
Data demonstrates this sad reality: Chainalysis discovers that the crime percentage of crypto transactions is shrinking with time. Moreover, a comparable organization recently established a tool that assists in tracking the cash of sanctioned individuals, making cryptocurrency even less private.
Bitcoin ATMs are 'Unregistered' with the FCA
According to the watchdog, these cryptocurrency ATMs in the UK must be registered with the FCA and 'comply with UK Money Laundering Regulations.' According to the regulator, these machines have insufficient background checks, especially for minor deposits. This has raised fears that they may be used for money laundering. So far, the FCA has been harsh on cryptos, routinely warning customers that "crypto-assets are unregulated and high-risk." Gidiplus, a Bitcoin ATM operator, recently lost a legal case in an effort to reverse the judgment after FCA denied a license to operate.