Crackdown on illegal crypto ATMs
Dozens of illegal crypto ATMs have been shut down since the start of the year, the Financial Conduct Authority (FCA) has revealed.
The financial regulator said that so far in 2023 it had visited and inspected 34 locations across the country which were suspected of hosting crypto ATMs, which could be used to purchase cryptocurrencies.
The FCA said that it had disrupted 26 machines operating unlawfully across the UK as a result of these inspections, which were part of a coordinated operation with law enforcement agencies.
For example, in May and June 18 sites suspected of operating these ATMs were inspected by the FCA, South West Regional Organised Crime Unit, Bedfordshire Police, Hertfordshire Police and the Metropolitan Police.
One investigation was launched after a member of the public notified Citizens Advice that they had paid £1,000 into a crypto ATM in Sheffield in order to purchase the currency. The machine stated the transaction was unsuccessful, but no funds were returned, with shop staff unable to provide any help.
A single point of contact was detailed on the crypto ATM, who was only reachable via WhatsApp, with the investor ultimately unable to make contact and get the funds returned. The ATM is no longer in operation.
No protection in place
Steve Smart, joint executive director of enforcement and market oversight at the FCA, emphasised that crypto ATM machines are illegal, and by using them you may be handing your money over to criminals. What’s more, there is no protection in place should something go wrong, meaning you may lose your money.
He continued: “It is also unlikely you will be able to contact the operator of the machine to resolve any problems you may have. Often, we see no effective channels of communications for people to get in touch with the operator.
“We will continue to warn the public and take appropriate enforcement action against unregistered crypto ATM operators.”
Protecting crypto investors
Earlier this year, the Government published “robust” plans to regulate the cryptocurrency sector.
Andrew Griffith, economic secretary to the Treasury, said that while it wanted to see the sector grow, it was crucial to ensure that consumers who embrace this new technology are protected.
And last month the FCA outlined new measures to protect those looking to invest in cryptocurrencies, including a 24-hour cooling off period for first-time investors, a ban on referral incentives and requirements for firms to make the risks clearer to investors.