UK Financial Watchdog Makes History with First Charge against Operator of Illegal Crypto ATM Network

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UK Financial Watchdog Makes History with First Charge against Operator of Illegal Crypto ATM Network

The United Kingdom’s financial regulator has filed its first charges against an individual for operating a network of illegal cryptocurrency ATMs. According to the Financial Conduct Authority (FCA), 45-year-old Olumide Osunkoya ran a crypto ATM network in the UK, that successfully processed several million pounds worth of digital assets.

According to reports, Osunkoya operated these ATMs from December 29, 2021, to September 8, 2023, without the required FCA registration. His network of machines processed £2.6 million.

The charge is a violation under the Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs). At the moment, the UK has no legal crypto ATM operators.

The FCA’s joint executive director of enforcement and market oversight sounded a note of warning to defaulters. According to Therese Chambers:

“Our message today is clear. If you’re illegally operating a crypto ATM, we will stop you. If you’re using a crypto ATM, you are handing your money directly to criminals. Criminals can exploit crypto ATMs to launder money globally.”

According to an official statement from the FCA, Osunkoya began as a director of a company called Gidiplus Ltd and later was the sole practitioner. The FCA is now charging Osunkoya with two offenses under Regulations 86 and 92 of the money laundering regulations. In addition, Osunkoya is charged with two offenses connected to the use of fake documents as part of the illegal crypto activity. There is also another offense related to possession of criminal property under the Proceeds of Crime Act 2022.

Last April, police in England’s Kent County searched a shop and found a few crypto ATMs, with one on public display. The police arrested 37-year-old Habibur Rahman and charged him for operating the machine without FCA registration, also accusing him of laundering £300,000 of criminal funds by converting to crypto. It was the first time an individual was charged for running a single ATM without FCA registration.

In July last year, the FCA shut down 26 crypto ATMs in the UK, part of a broad investigation targeted at unauthorized machines operating in the country. The watchdog shut ATMs in London, Nottingham, Exeter, Sheffield, and Leeds. The FCA’s official release refers to a case reported to the Citizens Advice Bureau, an independent organization that assists people with varying issues. According to the release, someone paid £1,000 into a Sheffield crypto ATM but received no crypto and did not get back their funds. Unfortunately, staff at the shop offered little help.

Over time, the FCA has repeatedly warned against the use of crypto ATMs. However, regulations vary between countries. For instance, according to an April filing with the United States Securities and Exchange Commission (SEC), crypto ATM operator Bitcoin Depot hit $689 million in revenue for fiscal 2023, a 7% increase from the year before. At the time, the company expressed plans to add 8,000 kiosks to its network by the end of the year.next

UK Financial Watchdog Makes History with First Charge against Operator of Illegal Crypto ATM Network