British authorities have taken a firm stand against illegal crypto activities, with the Financial Conduct Authority (FCA) charging Olumide Osunkoya, a London resident, for operating unauthorized crypto ATMs. This groundbreaking move signals the first prosecution of an individual for running such machines without proper FCA registration.
The FCA's crackdown on illicit crypto ATMs extends beyond Osunkoya's case, reflecting the agency's determination to combat criminal endeavors facilitated by these machines. The ability of users to convert money into crypto assets through these ATMs has raised concerns about potential links to money laundering and terrorist financing.
crypto-atms">UK FCA Cracks Down: London Man Faces Charges for Illegally Operating crypto ATMs
Osunkoya stands accused of overseeing crypto ATMs and processing transactions totaling £2.6 million ($3.4 million) between December 2021 and September 2023. The FCA's warning about the risks associated with unregistered crypto ATMs highlights the global implications of allowing criminals to exploit these machines for illicit activities.
Aside from facing charges under the Money Laundering Regulations, Osunkoya also confronts allegations under the Forgery and Counterfeiting Act 1981 for falsifying documents during his operations, as well as a charge of possessing criminal property under the Proceeds of Crime Act 2002. His activities, conducted without FCA oversight, have been a focal point of legal scrutiny.
“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,”
Therese Chambers, the FCA’s joint executive director of enforcement and market oversight, emphasized the severity of the charges against Osunkoya and warned potential users about the inherent risks posed by unregistered crypto ATMs. Osunkoya is scheduled to appear in Westminster magistrates court to address charges related to money laundering, terrorist financing, and fund transfers.
The FCA continues to educate the public on the risks associated with cryptocurrencies, particularly in an environment where regulations concerning digital assets remain relatively lenient. The agency advises caution to individuals considering investments in crypto, emphasizing the possibility of losing the entire investment.
crypto">With an 86% Rejection Rate, Is the UK Shutting Its Doors on crypto?
The FCA's stringent approach to overseeing the crypto space has resulted in the dismantling of 26 illegal crypto ATMs across the UK in the previous year. This concerted effort aligns with broader European initiatives aimed at curbing unregulated crypto activities, as evidenced by Germany's recent seizure of nearly €250,000 in a crackdown on illegal crypto ATMs.
Since February 27, the FCA has refrained from granting registration to new crypto firms, signaling over six months without approvals. The agency's stringent oversight of anti-money laundering and counter-terrorist financing within the crypto sector has led to an 86% rejection rate of applications submitted for approval since January 2020.
Recent enforcement measures include the arrest of Habibur Rahman, the first individual in the UK charged with operating an illegal cryptocurrency ATM. Rahman faces allegations of laundering $392,557 by converting cash into crypto, highlighting the severity of unauthorized crypto transactions.
Amid the regulatory crackdown, none of the 44 registered crypto companies in the UK have received authorization for crypto ATMs, underscoring the illegality of such operations within the country. The FCA's intensified efforts to combat illegal crypto ATMs have resulted in significant raids across various cities, demonstrating the agency's commitment to enforcing regulatory guidelines.
TRM Labs' research indicates that the cash-to-crypto industry has processed at least $160 million in illicit volumes since 2019, prompting coordinated law enforcement actions on a global scale. While the UK has effectively curbed the crypto ATM market, other regions like Australia have witnessed a notable surge in crypto ATM installations.
Australia's crypto ATMs witnessed a staggering 1,700% increase over two years, accounting for 2.7% of the global distribution. Germany's recent seizure of 13 crypto ATMs and €250,000 ($279,000) as part of an anti-illegal crypto initiative further illustrates the concerted efforts worldwide to combat unauthorized crypto activities.
