Illegal crypto ATMs are still operating in corner shops around the country despite a crackdown by the financial watchdog, a recent report has claimed, warning that these ATMs are a risk to unwitting customers, who may not know they are illegal and could struggle to get cash back if the transaction were to go wrong.
Shopkeepers who have the machines on their premises may also be providing a “perilously simple” way for criminals to money launder, through a technique known as “smurfing”, i stated on Tuesday (23) citing lawyers’ warning.
The Financial Conduct Authority (FCA) has previously warned operators of crypto ATMs in the UK to shut their machines down or face enforcement action including potential criminal charges. The report stated that maps circulating online still show more than a dozen of the ATMs operating in London, Manchester and Birmingham.
In its report, the publication stated that it visited two of the machines in corner shops in inner London within the past week in which the ATMs allow customers to move bitcoin and other cryptocurrencies on to a “digital wallet” using cash. The machines seen by i were prominently displayed, with clear instructions on how to obtain cryptocurrency using the machine.
One shop, just a few minutes walk from a Zone One London tube station had adverts outside, flagging that customers could purchase bitcoin in the store. One of the machines that i was able to find said it was operated by Big Sea Coins, which claims on its website it operates at 11 locations in the UK.
The FCA has said it is continuing to inspect and take action against those hosting unregistered crypto ATMs in the UK, and is liaising with the Association of Convenience Stores (ACS).
It said that it regularly repeats warnings that that cryptoassets are unregulated and high risk, which means people are very unlikely to have any protection if things go wrong.
ACS chief executive James Lowman said that the body is working with the FCA on ensuring that retailers understand the regulations surrounding unregistered cryptocurrency ATMs. There are very few of these operating in the UK, but it is important that both consumers and retailers appreciate the risks associated with this technology.”
The FCA has said that none of the crypto asset firms registered with it have been approved to offer crypto ATM services, meaning that any of them operating in the UK are doing so illegally and people should not be using them.