The United Kingdom Financial Conduct Authority (FCA) has ramped efforts to shut down cryptocurrency ATMs in the region. The latest clampdown follows an earlier warning that such machines were illegal, as their operators are not registered with the FCA.
Crypto ATMs are machines designed to enable users to buy cryptocurrencies using cash or debit cards. The machine operator charges a premium on the purchase, which may be fulfilled through partner crypto exchanges. However, the FCA has alleged that most machines are used for fraudulent activity.
In an update released on July 11, the financial markets regulator confirmed it had disrupted 26 crypto ATMs since the start of the year. Between May and June, the FCA collaborated with police forces in different jurisdictions to inspect 18 sites suspected of illegally operating crypto ATMs.
The FCA found that, in several cases, the crypto ATM operator did not provide sufficient communication channels for users. A Sheffield local called the Citizens Advice Bureau in a case study to complain about having £1000 stuck in a crypto ATM. The shop staff could not provide help after a transaction was marked unsuccessful.
FCA's Joint Executive Director of Enforcement and Market Oversight, Steve Smart, warned investors about the risks of using crypto ATMs. He stated:
"If you use a crypto ATM in the UK, you are using a machine that is operating illegally, and you may be handing your money over to criminals. You will not be protected if something goes wrong, and you could lose your money."
Following the ongoing crackdown, only ten crypto ATMs still operate in the UK, according to industry tracker CoinATMRadar. There were around 80 crypto ATMs back in March 2022.
Meanwhile, despite its campaign against crypto ATMs, the FCA has remained open-minded in regulating crypto assets. The regulator provides a regulatory regime for crypto companies and recently awarded a license to Bitstamp.
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