TL;DR Failure

  • The UK financial regulator has shut down 81 Bitcoin cash points and deemed them illegal.
  • The FCA warns of the imminent closure of convenience stores and supermarkets that host cryptocurrency ATMs.

The UK financial regulator has written to 81 cryptocurrency ATM providers requesting closure. The Financial Conduct Authority issued the order and raised the possibility that action would be taken if the order was not complied with. Most importantly, the UK Financial Conduct Authority declared them to be illegal.

UK Government Tightens Controls on Cryptocurrency Regulations

Most cryptocurrency ATMs in the UK are located in convenience stores and supermarkets. ATMs enable customers to exchange cash for bitcoins. However, they do have minimal security procedures, especially for smaller quantities, and they are all unregulated.

Because they are not licensed, their presence has fueled concerns about the kingdom's security. Government organizations fear that these ATMs may be used for money laundering, prompting the FCA to take action.

The regulator's approach is consistent with its well-known uncompromising approach to cryptocurrency regulation. In January 2022, the UK financial regulator banned CoinMarkets from conducting unregulated activities in the UK.

The decision, the country's most important regulator to date, comes amid a global crackdown on the cryptocurrency business. According to the Financial Conduct Authority's registration, CoinMarkets must confirm by June 30 that it has removed all advertising and financial inducements.

In addition, the exchange must clearly state on its website, social media platforms and all other communications that it is no longer permitted to operate in the UK.

Cryptocurrency ATMs under fire

The market for cryptocurrency assets in the U.K. is relatively immature, with only 33 companies on the country's official list and another 22 on a time-limited waiting list that ended in March. According to Coin ATM Radar data, there are currently 81 functioning cryptocurrency ATMs in the U.K. In addition, supermarkets and convenience stores that have installed ATMs have received warnings that could lead to closures.

So far, the Financial Conduct Authority (FCA) has banned 110 companies, including one Gidiplus that lost a court case. According to the announcement, the UK Upper Tribunal rejected an appeal submitted by the cryptocurrency ATM operator. The FCA noted a lack of evidence about how Gidiplus conducted its business in a generally compliant manner.

Meanwhile, the operator's appeal against the FCA's rejection of its application for registration under the MLR is still pending in court. The FCA posted the notice on its website on Friday, March 11, stating that

"Cryptocurrency ATMs that offer cryptocurrency asset exchange services in the UK must be registered with us and comply with the UK Money Laundering Regulations (MLR). None of the cryptocurrency asset companies registered with us are authorised to offer cryptocurrency ATM services, which means that any of them operating in the UK are illegal and consumers should not use them."

The UK is not the first country to enact legislation for cryptocurrency ATMs. The UK's ban follows closely on the heels of similar advertising restrictions implemented in Spain and Singapore. In January 2022, MAS forced Singapore's main cryptocurrency ATM operator to stop its ATMs due to regulatory restrictions.

After the Monetary Authority of Singapore (MAS) outlawed cash-to-cryptocurrency ATMs, they began a broader crackdown on advertising cryptocurrencies to the public.