The UK’s financial regulator has warned consumers not to use cryptocurrency ATMs operating in the country, as they are doing so illegally.
The Financial Conduct Authority (FCA) said any machines offering crypto-asset exchange services in the UK must be registered and comply with UK Money Laundering Regulations (MLRs).
“None of the crypto-asset 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,” it said.
“We are concerned about crypto ATM machines operating in the UK and will therefore be contacting the operators instructing that the machines be shut down or face further action.”
The FCA currently lists over 240 crypto-asset firms on its site, none of which are registered with the regulator. However, it said that 110 are no longer operational, leaving around 130 that might be doing business illegally.
UK court, the Upper Tribunal, last month ruled against one such firm, Gidiplus, which appealed against the FCA’s refusal to grant its application for registration under the MLRs.
“The judge concluded that there was a ‘lack of evidence as to how Gidiplus would undertake its business in a broadly compliant fashion,’” the FCA explained.
“We regularly warn consumers that crypto-assets are unregulated and high-risk which means people are very unlikely to have any protection if things go wrong, so people should be prepared to lose all their money if they choose to invest in them.”
The news comes amidst a broader crackdown on cryptocurrency providers as Western sanctions start to bite in Russia and Belarus. The FCA on Friday reminded financial institutions and registered crypto-asset firms of their obligations to ensure customers don’t try to circumvent the sanctions.
It released a list of screening controls and red flag indicators to take note of.
Last week President Biden signed an executive order designed to enhance consumer protection and reduce the national security risks posed by cryptocurrency.