UK FCA Orders Shut Down of Crypto ATMs or Face Legal Action

Key Insights:

• FCA shut down all 80 operational Bitcoin ATMs after declaring them illegal.
• The regulator has raised the prospect of enforcement if not followed.
• FCA said none of the crypto ATM operators currently functioning are registered.

The UK’s Financial Conduct Authority (FCA) has banned operations of all crypto ATMs in the country, stating none of them are registered.

Per an announcement Friday, the regulator has written to crypto ATM providers with the directive to cease operations immediately or face legal action.

According to data from Coin ATM Radar, the UK has 80 functioning Bitcoin ATMs, primarily placed in supermarkets and convenience shops.

Bitcoin ATMs ‘Not Registered’ with FCA

The watchdog said that these crypto ATMs in the UK must be registered with the FCA and ‘comply with UK Money Laundering Regulations’. It noted,

“None of the cryptoasset firms registered with us have been approved to offer crypto ATM services, meaning that any of them operating in the UK are doing so illegally, and consumers should not be using them.”

According to the regulator, these machines have limited background checks, particularly for smaller deposits. This has led to concerns that people could use them for money laundering purposes.

The FCA has so far been strict on cryptos and regularly warns consumers that “cryptoassets are unregulated and high-risk.”

Recently, a Bitcoin ATM operator Gidiplus lost a judicial review in an attempt to overturn the decision after FCA rejected a license to operate.

What is Banned in the UK?

The UK authorities have banned a slew of crypto-related activities, including selling all cryptocurrency derivatives (including exchange-traded notes) and banning crypto advertisements.

FCA also cracked down on the world’s biggest cryptocurrency exchange Binance‘s operations amid a broader global crackdown on the largely unregulated global market for cryptocurrencies.

Additionally, the financial watchdog has been tightening crypto regulations. This has led more crypto firms to withdraw their applications from the regulator because they don’t meet the required anti-money laundering standards.

Around 90% of applications from crypto firms in the UK are either “withdrawn or refused,” FCA chief executive Nikhil Rathi said in December.