According to an FCA notice published on Friday, none of the
crypto ATM operators in the UK are registered to do business in the country. As
such, all such machines are operating illegally.
There are 81 crypto ATMs in the UK, according to data from
CoinATMRadar, with the majority located in the London Area. Manchester, Oxford
and Birmingham also host a few machines.
The FCA’s notice comes on the heels of a court ruling
against Gidiplus, a crypto ATM operator in the UK. Gidiplus previously lodged
an appeal with the Upper Tribunal challenging the FCA’s decision to reject its
licensing application under the Money Laundering Regulations (MLR) regime.
At the time, the FCA rejected the Gidiplus application due
to insufficient identity verification for customers doing small transactions.
The FCA stated that Gidiplus’s identity verification for people doing transactions
below 250 British pounds ($327) opened to door to “smurfing” risks.
Smurfing is a technique allegedly used by money launderers
where large sums of money are deposited in smaller amounts to evade detection
from the authorities. Ruling on the matter, the court stated that Gidiplus had
failed to prove that it could operate in a manner compliant with MLR protocols.
Since assuming its role as the crypto money laundering
overseer in 2020, the FCA has moved to tighten cryptocurrency regulations in
the UK. Earlier in March, the regulator stated that it had investigated over
300 crypto businesses in the last year.
Singapore made a similar move to shutter crypto ATMs earlier
this year as part of a wider crackdown on digital currency marketing.