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The Financial Conduct Authority and West Yorkshire Police have disrupted numerous illegal crypto ATMs
By
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Alex Scroxton,
Security Editor
Published: 14 Feb 2023 15:00
The UK’s Financial Conduct Authority (FCA), working alongside West Yorkshire Police’s Digital Intelligence Unit, has raided a number of properties in Leeds suspected of internet hosting illegal cryptocurrency automated teller machines (ATMs).
The joint motion, utilizing powers granted by the Money Laundering Regulations 2017, got here after a prolonged evidence-gathering train.
Like their professional counterparts, a well-known function outdoors banks for greater than 50 years, crypto ATMs are standalone digital models that allow customers to purchase and promote cryptocurrency belongings by paying in money or utilizing a debit card, which they then deposit within the person’s crypto pockets.
Although there are lots of hundreds of them around the globe – the bulk within the US – their use within the UK is unsanctioned and, since no crypto ATM operators are registered with the FCA, illegal. The FCA has beforehand informed crypto ATM operators working within the UK that their actions are illegal and ordered their shutdown.
“Unregistered Crypto ATMs operating in the UK are doing so illegally [and] we will continue to identify and disrupt unregistered crypto businesses operating in the UK,” mentioned Mark Steward, govt director of enforcement and market oversight on the FCA.
“Crypto businesses operating in the UK need to be registered with the FCA for anti-money laundering purposes. However, crypto products themselves are currently unregulated and high risk, and you should be prepared to lose all your money if you invest in them.”
Detective sergeant Lindsey Brants of the Force Cyber Team at West Yorkshire Police added: “Having carried out intelligence gathering work throughout West Yorkshire, we quickly established the places of a number of reside crypto ATMs.
“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. We then shared our findings with the Financial Conduct Authority,” mentioned Brants.
“We are pleased to be able to work in partnership with the FCA in what we believe is a national first here in West Yorkshire.”
The FCA mentioned it was now reviewing proof gathered throughout the raids and can think about potential motion towards the operators of the unsanctioned models. It can be working with different legislation enforcement companies across the UK to disrupt and disable any remaining crypto ATMs.
The regulator reiterated that there aren’t any legally operated crypto ATMs within the UK, and that cryptocurrencies and associated belongings are at present not regulated and as such carry a really excessive diploma of threat.
Additionally, crypto traders who get caught up in a rip-off equivalent to a rug-pull or comparable can not anticipate any formal redress.
Meanwhile, the UK Treasury is urgent forward with plans to launch its personal digital foreign money, which may in the end result in a government-backed digital pound that’s already being dubbed Britcoin.
Earlier in February, it opened a four-month session on the topic, and it’s in search of a head of central financial institution digital foreign money to handle the venture.
The Treasury argues {that a} digital foreign money backed by a central financial institution such because the Bank of England will retain its worth, in contrast to unregulated cryptocurrencies, and replicate the usage of money, whereas conforming to the best requirements of knowledge safety and privateness.
“A digital pound issued and backed by the Bank of England could be a new way to pay that is trusted, accessible and easy to use. That is why we want to investigate what is possible first, whilst always making sure we protect financial stability,” mentioned chancellor of the exchequer Jeremy Hunt.
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