UK FCA Cracks Down On Crypto ATMs, Saying They Are Unlicensed

The UK Financial Conduct Authority (FCA) has told crypto ATM operators to close their machines or face penalties as unlicensed operators.

FCA published a notice, saying that none of the crypto ATM operators in the UK are registered to conduct the business, and are operating illegally.

CoinATMRadar reveals that there are 81 crypto ATMs in the United Kingdom – majority located in the London, with Manchester, Oxford and Birmingham hosting a few machines.

The FCA’s notice was issued after a court ruling against Gidiplus, a crypto ATM operator in the country. Gidiplus earlier appealed with the Upper Tribunal challenging the FCA’s decision to reject its licensing application under the Money Laundering Regulations (MLR) regime.

The regulator rejected Gidiplus’s application due to insufficient identity verification for customers doing small transactions. According to the FCA, Gidiplus’s identity verification for people doing transactions under 250 British pounds ($327) opened to door to “smurfing” risks.

Smurfing is a money-laundering technique involving the structuring of large amounts of cash into multiple small transactions. Smurfs often spread these small transactions over many different accounts, to keep them under regulatory reporting limits and avoid detection.

Since becoming the crypto money laundering watchdog in 2020, the FCA has moved to tighten cryptocurrency regulations in the country. Earlier in this month, the regulator stated that it had investigated over 300 crypto businesses in the last year.

UK was not the first country to close down crypto ATMs. Singapore made a similar move earlier this year as part of a wider crackdown on digital currency marketing efforts.