Illicit crypto ATMs get slammed down by FCA

The United Kingdom’s Financial Conduct Authority (FCA) has taken action against 26 cryptocurrency ATMs this year. Having inspected 34 so far, over 75% have been disrupted owing to “illegal” operations.

The FCA made a call to cryptocurrency ATM operators in the UK in February to comply with regulations or shut down ATMs. Since then, the FCA has been taking action against ATM operators to find those operating outside of regulatory compliance. According to Steve Smart, the executive director of enforcement for the FCA, cryptocurrency ATMs illegally operating could be a risk to investors losing their funds. He noted:

“If you use a crypto ATM in the U.K., you are using a machine that is operating illegally and you may be handing your money over to criminals.” 

He also added that those who do fall prey to cryptocurrency scams through Bitcoin ($BTC) or cryptocurrency-specific ATMs will not be under the protection of the government. Any funds lost would be very difficult to recover as a result of the decentralisation of cryptocurrency and its untraceable nature.

Scammers often use fear tactics and urgency to lure victims to make snap decisions to transfer funds to cryptocurrency exchanges and ATMs. Fraudulent players also often impersonate officials to persuade users into trusting them to transfer funds too. The FCA has warned users that law enforcement agencies and officials will never contact individuals to ask for any payments over the phone.

According to the FCA report, there are regular warnings to consumers that cryptocurrency assets are unregulated and “high-risk”, made more risky by the government not offering financial protection should anything go wrong.

For crypto ATM providers and crypto exchanges to operate in the UK, they must be registered and comply with the FCA and the country’s money laundering regulations.

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