- A London businessman has been charged by the UK’s Financial Conduct Authority (FCA) for running an illegal £2.6 million crypto ATM network, marking the FCA’s first criminal case in this sector.
- The charges highlight the UK’s stringent stance on unregulated crypto activities and underscore the potential legal risks of using unlicensed crypto ATMs.
In a landmark move, the Financial Conduct Authority (FCA) of the United Kingdom has charged a 45-year-old London businessman for illegally operating a network of cryptocurrency ATMs across the country. This enforcement is the FCA’s inaugural criminal prosecution in the realm of unregistered crypto activities involving physical machines, setting a precedent in the regulatory landscape.
Illegal Operations Exposed
The accused, whose operations spanned from December 2021 to September 2023, is alleged to have facilitated transactions amounting to over £2.6 million through several ATMs. These machines provided users the capability to buy or convert traditional money into cryptocurrencies like Bitcoin. However, the FCA stresses that all such ATMs in the UK are considered illegal, as no operators have registered under the necessary regulatory frameworks.
This case is notably underpinned by the Money Laundering Regulations of 2017, reflecting the FCA’s stringent approach to combatting financial crimes in the emerging digital currency markets. The individual faces multiple charges: two counts under the Money Laundering Regulations for operating without the necessary FCA registration, two counts under the Forgery and Counterfeiting Act 1981 for the use of forged documents, and one count of possessing criminal property under the Proceeds of Crime Act 2002.
Therese Chambers, the joint executive director of enforcement and market oversight at the FCA, conveyed a stern warning:
“If you’re illegally operating a crypto ATM, we will stop you. If you’re using a crypto ATM, you are handing your money directly to criminals.”
Regulatory Enforcement Efforts
This enforcement action comes on the heels of an intensive year for the FCA, which, in collaboration with law enforcement, inspected 34 locations and dismantled 26 illicit crypto ATMs in 2023. Despite the global proliferation of crypto ATMs, with over 31,000 units in the United States alone, the UK maintains a rigorous regulatory framework intended to prevent the misuse of such technologies for money laundering or other illegal activities.
Moreover, the prevalence of scams associated with crypto ATMs is rising, compounding the challenges regulators face. Emma Fletcher, a senior data researcher at the Federal Trade Commission (FTC), noted the increasing use of these ATMs in fraud schemes, with losses reported at $110 million in 2023 due to such scams.
As the accused prepares for his court appearance at Westminster Magistrates’ Court on September 30, 2024, the outcome of this case could send ripples through the cryptocurrency services sector, potentially deterring other operators from flouting the law. This incident not only underscores the FCA’s resolve in enforcing financial regulations but also signals the potential hazards for users engaging with unverified financial services in the cryptosphere.