The UK Financial Conduct Authority (FCA) has announced that all cryptocurrency ATMs in the country must cease operation.
It comes from a recent push to stop money laundering through digital currencies. Under the existing law, all active digital currency ATMs are unregistered and therefore illegal.
On Friday March 11, the UK Money Laundering Regulations were updated to state: “Crypto ATMs providing crypto asset exchange services in the UK must be registered with our agency and comply with the UK money laundering regulations (mlr). None of the crypto asset companies registered with us have received approval from us for crypto atm services. This means that any company operating in the UK is providing this service illegally and consumers should not use them.”
There are currently 81 active cryptocurrency ATMs located in various parts of the UK. While many of them utilize the KYC feature, the UK government has made it clear that they are still not legal to use as they are unregistered.
Cryptocurrency ATMs allow users to convert their cash into cryptocurrencies or to sell their cryptocurrencies for fiat. While many of these ATMs include a KYC feature, there are some that require no information on the buyer or seller. The lack of standard for KYC is one of the key reasons the government has pushed to stop crypto ATMs from functioning.
The UK has been hesitant to release any regulations which could hinder the growth of digital currencies. As of now, they have only restricted a few cryptocurrency exchanges from offering services due to being unregistered and offering leveraged trading. Recently, however the government has been pushing to crack down on money laundering and tax evasion in cryptocurrencies.
Countries like the US have taken the alternate action against crypto ATMs and have allowed them to be added to many major retailers and airports. These ATMs are restricted to a few specific companies and all include a KYC feature.
The UK FCA has always warned consumers to avoid cryptocurrencies as they lack regulatory clarity as well as legal and financial protections. The UK government recently placed a ban on cryptocurrency advertisements because they did not include enough information about the risks associated with digital currencies.