Posted on: June 25, 2022
According to a March 10 letter released by the U.K.’s Financial Conduct Authority (FCA), bitcoin and other crypto ATMs that facilitate the purchase and trading of crypto are not allowed in the United Kingdom. The government authority claims that anyone operating a bitcoin ATM is doing so illegally and will be forced to cease operations.
The announcement, which hasn’t been received well by the crypto community and others, comes simultaneously with the U.K. announcing a new regulatory regime for cryptocurrency.
According to 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 U.K. are doing so illegally, and consumers should not be using them.” They added that they “are concerned about crypto ATMs operating in the U.K. and will therefore be contacting the operators instructing that the machines be shut down or face further action.”
Over 240 crypto-asset firms are listed on the FCA’s website, but none are registered. However, it said 110 are no longer operational, leaving around 130 that might be doing business illegally.
Money holders can withdraw cash from ATMs and exchange it for bitcoins, or vice versa. Due to the private nature of money transactions, these machines may facilitate cryptocurrency laundering because money transactions are confidential.
The bitcoin blockchain offers an exit point from the significantly traceable bitcoin network, which assists in detecting illegal transactions. Online service Coin ATM Radar reports that there are only 80 bitcoin ATMs operating in the United Kingdom, compared to over 32,000 in the United States. The ATM was born in Canada, where there are approximately 2,300 ATMs.
The FCA claims that cryptocurrency ATMs in the U.K. must be registered with them and conform to U.K. money laundering regulations. Additionally, it claims that the machines’ background checks are insufficient for small deposits.
There have been concerns that they may be used for money laundering. The FCA has consistently warned customers that crypto assets are unregulated and high risk.
International governments are rushing to regulate crypto transactions with sanctions and penalties. After being cut off from the financial telecommunication network the Society for Worldwide Interbank Financial Telecommunication, some worry that Russia will begin using cryptocurrency to circumvent Western trade restrictions.
Nonetheless, it’s not an excellent solution for criminals. Crypto transactions inherently are pseudonymous; however, governments may flag them higher than cash if they can connect a blockchain address to a particular individual’s identity.
American blockchain analysis company Chainalysis discovered that the percentage of criminal crypto transactions is shrinking with time. Additionally, a similar organization has recently developed a tool that helps track the cash of sanctioned individuals, thus making cryptocurrency even less private.
An announcement regarding crypto regulation in the U.K. came just before the ban on crypto ATMs. According to Her Majesty’s Treasury, Britain plans to become a global hub for crypto-asset technology and investment by recognizing stablecoins as a valid form of payment.
The FCA led a crypto sprint, a National Futures Trust, and an engagement group to work more closely with the industry. In addition to attracting investment and jobs, this measure aims to ensure that U.K. financial services remain at the cutting edge of technology. This includes:
— A “financial market infrastructure sandbox,” which enables firms to experiment and innovate
— Working closely with the crypto-asset industry by establishing a Cryptoasset Engagement Group
— Investigating ways to enhance the competitiveness of the U.K. tax system to encourage the development of the crypto-asset sector
— Working with the Royal Mint on a non-fungible token (NFT) as a symbol of the U.K.’s forward-thinking approach
The U.K.’s forward-thinking approach to crypto adoption and integration is clearly at odds with the country’s decision to ban crypto ATMs.
Firstly, crypto ATMs are a symbol of the progress and integration of cryptocurrency, and banning them outright sends a negative message to the crypto community and investors.
Secondly, the assumption that crypto ATMs are an incentive for criminals to launder money and operate illicitly is in stark contrast to cryptocurrency’s spirit and mechanism.
There are plenty of measures to ensure that criminals can’t act without consequence, and the blanket ban doesn’t seem to consider that.
Lastly, it sends a rather alarming message to crypto ATM providers and users that the service and the people involved can’t be trusted to act legally and morally. And this isn’t true.
Crypto ATMs are the most convenient way to buy and sell cryptocurrency; they’re quick, discreet, and ultimately, a great promoter of cryptocurrency trading. Cryptobase ATM is a premium provider of cryptocurrency ATMs.
You can buy and sell cryptocurrency for cash at Cryptobase ATMs within a few minutes, making it the most efficient and trouble free way to exchange crypto.
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