UK Shop Owner Charged for Operating Illegal Crypto ATM
In a landmark case, the first person in the UK has been charged with operating an unregistered cryptocurrency ATM. This development marks a significant step in the country’s crackdown on illicit digital asset operations.
Landmark Charge
Habibur Rahman, 37, from East Ham, London, has been charged with operating illegal crypto ATMs and laundering £300,000 in criminal cash. Rahman’s arrest follows a police raid on April 28, 2023, at the Gadcet shop located on Chatham’s High Street. During the search, several crypto ATMs were seized, including one prominently displayed to the public.
According to Kent Police, Rahman’s charges stem from operating these ATMs without the necessary registration from the Financial Conduct Authority (FCA). Additionally, he is accused of converting criminal proceeds into cryptocurrency, a practice increasingly associated with money laundering and other illicit activities.
Regulatory Response
Crypto ATMs have been under intense scrutiny since the FCA banned them in 2022. The regulatory body’s directive required operators to cease their operations unless registered, aiming to curb potential misuse. The FCA’s Director of Payments and Digital Assets, Matthew Long, highlighted the risks associated with unregistered crypto ATMs: “There are currently no crypto ATMs registered with the FCA – so if you’re using one of these machines, you could be handing your money to criminals.”
This case represents the first criminal charge related to the operation of these unregistered machines in the UK. The FCA’s previous warnings have emphasised the importance of registration to ensure compliance with regulatory standards.
Global Context
The crackdown on illegal crypto ATMs is part of a broader global effort to regulate the sector. Research by TRM Labs indicates that at least $160 million in illicit volumes has been processed through crypto ATMs since 2019. In response, various countries have enacted measures to tackle this issue.
For example, in Germany, law enforcement recently shut down 13 crypto ATMs and confiscated nearly €250,000 in cash for operating without the correct licenses. Conversely, the number of crypto ATMs has surged in some regions, such as Australia, where installations have increased by 1,700% over the past two years.
Conclusion
The case against Habibur Rahman underscores the ongoing challenges and regulatory efforts surrounding cryptocurrency transactions. As the UK legal system prepares for Rahman’s court appearance on October 10, this development serves as a stark reminder of the regulatory risks associated with operating unregistered crypto ATMs. The outcome of this case may set a precedent for future enforcement actions in the digital asset industry.
