FCA takes further action against unregistered crypto ATMs in East London

FCA takes further action against unregistered crypto ATMs in East London

9 Mar    Finance News, News

In a joint operation with the Metropolitan Police, the Financial Conduct Authority inspected several ATM sites, using its enforcement powers.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said: ‘Crypto ATMs operating without FCA registration are illegal and, as today shows, we will take action to stop this.

‘This operation, alongside last month’s action in Leeds, sends a clear message that we will continue to identify and disrupt unregistered crypto businesses in the UK.

‘Crypto products are not currently regulated and they are high risk. You should be prepared to lose all your money if you invest in them.’

Crypto ATMs allow people to buy or convert money into cryptoassets. There are currently no crypto ATM operators registered with the FCA, which they must be to operate legally.

The FCA is currently working with the National Economic Crime Centre to plan and coordinate action with law enforcement partners against operators of illegal crypto ATMs. This follows similar activity in Leeds, where the FCA inspected several sites suspected of hosting unregistered crypto ATMs, alongside West Yorkshire Police.

The FCA will review evidence gathered during these visits and consider taking further action where necessary.

Nicola McKinney, Partner at Quillon Law, commented: “Criminal prosecutions may arise from these raids of illegal crypto ATMs, carried out under anti money laundering powers afforded to law enforcement, if seized documents point to evidence of fraud and digital asset crime. These powers are being used in a new context, and are likely to lead to a greater number of charges being brought against crypto fraudsters.

“It has taken the FCA almost a year to undertake enforcement action against illegal crypto ATMS since issuing warnings in early 2022 and, while it is reassuring to see that concrete steps have been taken to protect investors, it does not inspire confidence that measures such as these have taken so long.

“Crypto ATMs based in the UK are the only affected entities in this instance and the probability that the majority of transactions converting fiat currency to cryptocurrency take place through online providers, further complicates the job of regulators and enforcement agencies due to the jurisdictional complexities this presents.

“There is still much for UK regulators and law enforcement to do in policing this rapidly evolving sector, and as crypto crime becomes more sophisticated it will require greater cross-border cooperation to create a sufficient global regulatory framework.”

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