- UK authorities have closed down crypto ATM sites for illegal operations.
- The regulator says no crypto firm has been approved to host crypto ATMs.
- Crypto and traditional finances will be regulated under the FSMA framework.
U.K. authorities have closed several cryptocurrency ATM sites in and around Leeds. The raids follow a joint investigation between the Financial Conduct Authority (FCA) and West Yorkshire Police’s Digital Intelligence and Investigation Unit.
The country’s top regulator, FCA, said the inspected sites were suspected of running illegally operated crypto ATMs, posing money laundering risks.
“Unregistered Crypto ATMs operating in the U.K. are doing so illegally. We will continue to identify and disrupt unregistered crypto businesses in the U.K.,” Mark Steward, FCA’s executive director of enforcement and market oversight, said.
The FCA’s executive director added that crypto businesses operating in the U.K. had to be registered with the FCA for anti-money laundering purposes. He warned customers to be prepared to “lose all your money” if they invest, as crypto products are unregulated and carry high risk.
Crypto ATM Sites Told to Cease and Desist
According to Det Sgt Lindsey Brants of the Force Cyber Team at West Yorkshire Police, the crypto ATM operators were sent warning letters to shut down operations.
“Warning letters were issued requesting the operators cease and desist using the machines and that any breach of regulations would result in an investigation under money-laundering regulations,” Brants said. “We then shared our findings with the Financial Conduct Authority.”
The FCA first sent the letters to crypto ATM hosts in March 2022, urging them to register with the FCA and comply with the U.K. Money Laundering Regulations or face legal consequences.
It stated that none of the crypto firms registered had been approved to offer crypto ATM services, deeming all in operation illegal.
The regulator also cited a case of Gidiplus, a firm offering crypto ATM services that appealed against the FCA’s refusal to approve its registration to continue trading. The appeal was denied as the judge concluded that Gidiplus lacked evidence of future compliance with regulations.
FCA’s Strict Stance on Crypto
Outside the crackdown on illegal crypto ATM operations, the FCA had declared its decision to impose stricter regulations on the crypto market.
Chair of FCA, Ashley Alder, stated in December that his administration would be rigid with crypto firms. Using FTX as an example, he said crypto firms were “deliberately evasive” and facilitated money laundering at scale.
“Our experience of crypto platforms, whether FTX or others, is that they are deliberately evasive. They are a method by which money laundering happens in size.”
The U.K. Treasury’s consultation paper published this month highlights a stricter set of requirements for crypto firms in the U.K., akin to traditional financial services.
The Treasury announced that crypto companies would be regulated under the framework of the U.K.’s Financial Services and Markets Act 2000 (FSMA), which will govern both traditional and crypto finances.
