The UK’s
Financial Conduct Authority (FCA) has taken unprecedented action against an
individual accused of running an illegal network of cryptocurrency ATMs. As the
market watchdog emphasizes, this is its first set of charges involving physical
machines that allow for the buying and selling of digital assets.
At the same
time, the FCA is reminding that “there are no legal crypto ATM operators in the
UK.” Any such machines operate illegally, and those using them indirectly contribute to the global money laundering scheme.
Illegal Crypto ATM Network
A 45-year-old London resident faces charges for allegedly operating
multiple crypto ATMs without FCA registration. These kiosks, which allow users
to buy or convert money into cryptocurrencies, processed transactions totaling
£2.6 million across various locations between December 2021 and September 2023.
We’ve charged Mr Olumide Osunkoya for unlawfully running multiple crypto ATMs without FCA registration. #CryptoATM #CryptoNews #FinancialRegulationhttps://t.co/eVWEvnMbUw
— Financial Conduct Authority (@TheFCA) September 10, 2024
This case
represents the FCA’s first criminal prosecution related to unregistered
cryptoasset activity under the Money Laundering Regulations of 2017. It also
sets a precedent as the first charges brought against an individual for
operating a network of crypto ATMs in the UK.
“Our
message today is clear. If you’re illegally operating a crypto ATM, we will
stop you,” commented Therese Chambers, joint executive director of enforcement and market
oversight at the FCA. “If you’re using a crypto ATM, you are handing
your money directly to criminals.”
The charges
against Osunkoya include two offenses under the Money Laundering Regulations
for operating crypto ATMs without FCA registration, two offenses under the
Forgery and Counterfeiting Act 1981 for allegedly creating and using false
documents, and an offense of possessing criminal property under the Proceeds of
Crime Act 2002.
Osunkoya is
scheduled to appear before Westminster Magistrates’ Court on September 30,
2024. The outcome of this case could have significant implications for the
regulation of cryptocurrency services in the UK and may serve as a deterrent to
others operating in this space without proper authorization.
FCA Shut Down 26 Illegal Crypto ATMs in 2023
This legal
action follows a recent FCA operation conducted in partnership with law
enforcement agencies to tackle illegally operated crypto ATMs across the
country. In 2023, the FCA inspected 34 locations suspected of hosting such
machines, resulting in the disruption of 26 unlawfully operating ATMs.
The efforts by the FCA seem to be a battle against windmills. In many other places around the world, crypto ATMs are immensely popular. For instance, in the United States, over 31,000 such devices have been installed. Although the regulator may be right in saying that using crypto ATMs facilitates the circulation of cash of unknown origin and may support the laundering of dirty money, many developed economies have implemented a series of regulations aimed at blocking this process.
Unfortunately, ATMs are also used in scams. According to data from the Federal Trade Commission (FTC), users lost $110 million due to these scams in 2023 alone.
Emma Fletcher, a senior data researcher at the FTC, explained that scammers are increasingly using these machines to deceive people. “Scammers are using these machines as a way to take money from people more than we’ve seen in the past,” she told NBC News.
This article was written by Damian Chmiel at www.financemagnates.com.
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