Syed Imran Haider 
Unregistered crypto ATMs have caught the eye of the financial regulator of the United Kingdom i.e. the Financial Conduct Authority (FCA).
According to the regulator, a number of cites had been inspected recently in the North of England in the city of Leeds, as they suspected that the crypto ATMs present there were operating illegally.
The investigation
The FCA further revealed that it had carried out joint investigations into the sites in question and had collaborated with local police forces for this purpose.
This included the Digital Intelligence and Investigation Unit of the West Yorkshire Police.
Mark Steward, the executive director of market oversight and enforcement at the FCA, said that all crypto businesses that operate in the United Kingdom are required to register with the regulator.
This is for the purpose of anti-money laundering, but he added that this only applied to businesses. Crypto products are not regulated for now and carry a great deal of risk.
Therefore, he warned that people should only invest in crypto products if they are ready to lose their entire investment.
The announcement said that the FCA would decide on further enforcement after it has evaluated the evidence that was accumulated during these visits.
The warnings
Detective Sergeant Lindsay Brants is part of the Cyber Team of the West Yorkshire police force and revealed that operators had been previously been sent warning letters to cease and desist their operations.
They had been told that if they continued to operating the crypto ATMs, it would be a violation of money-laundering regulations, which would result in an investigation.
The FCA had also informed all hosts and operators of crypto ATMs in March last year that running the machines without the authorization of the regulator would result in legal consequences.
Even though there is no specific law that currently exists in the United Kingdom that applies to the operation of crypto ATMs, the FCA has not granted approval for any of them.
The concerns
Money laundering and crypto ATMs have been linked on numerous occasions and the concept is certainly not theoretical.
As a matter of fact, potential links have been highlighted globally between these crypto ATMs and organized crime.
The US Drug Enforcement Agency (DEA) conducted a study last year, which discussed how transnational criminal organizations were making use of crypto ATMs for laundering money, in combination with traditional methods.
It is also important to note that the UK is not just focusing on crypto ATMs, but is working on introducing harsher regulations for the industry in general.
A consultation paper issued by the Treasury had outlined new rules earlier this month, which would impose stricter requirements on crypto companies in the United Kingdom.
The rules are in line with what traditional financial firms are expected to deal with. Likewise, companies that want to advertise and promote crypto products in the country will also need the FCA’s approval.
Companies that do not follow the routes highlighted for crypto promotion could be subjected to imprisonment of about two years.
