FCA issues warning on crypto ATMs

The Financial Conduct Authority (FCA) has warned operators of cryptocurrency ATMs in the UK to shut their machines down or face enforcement action.

Cryptocurrency ATMs allow consumers to buy cryptocurrencies such as Bitcoin or Ethereum using their debit cards.

There are currently 81 bitcoin ATMs in the UK, according to data from Coin ATM Radar.

The financial services watchdog said that crypto ATMs offering cryptoasset exchange services in the UK must be registered with it and comply with UK Money Laundering Regulations (MLR).

The FCA said that none of the cryptoasset firms registered with it have been approved to offer crypto ATM services, meaning that any of them operating in the UK are doing so illegally and consumers should not be using them.

The watchdog referenced a recent ruling by the Upper Tribunal against Gidiplus, a firm offering crypto ATM services, which wanted to continue trading, pending the Upper Tribunal’s determination of its appeal against it refusing its application for registration under the MLRs.

According to the FCA, the judge concluded that there was a ‘lack of evidence as to how Gidiplus would undertake its business in a broadly compliant fashion’.

The news comes after a year where the FCA has taken a harsher stance on cryptocurrency regulation.

Earlier this month the FCA revealed that it opened over 300 cases relating to potentially unregistered cryptoasset businesses over a six-month period last year, many of which it suspected of being scams.

“We are concerned about crypto ATM machines operating in the UK and will therefore be contacting the operators instructing that the machines be shut down or face further action,” said an FCA spokesperson. “Since we published the list of unregistered crypto firms that may have been continuing to conduct business, a recent assessment found that 110 are no longer operational.”

They added: “We regularly warn consumers that cryptoassets are unregulated and high-risk which means people are very unlikely to have any protection if things go wrong, so people should be prepared to lose all their money if they choose to invest in them.”

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