- The FCA says all crypto ATMs in the UK have been operating illegally
- The regulator, therefore, ordered operators of crypto-to-cash machines to halt their services or face legal consequences
The FCA, UK's financial conduct regulator, has banned the operation of crypto ATMs in the country. The financial authority stated in a Friday notice that it had asked all operators of these machines to suspend their activities or "face enforcement action."
No crypto ATM operator has received approval
The order comes on the grounds that the operators have not registered with the regulator. The FCA pointed out that it has not yet given the green light to offer crypto ATM services to any of the crypto-entities that have completed registration.
"Crypto ATMs offering crypto asset exchange services in the UK must be registered with us and comply with UK Money Laundering Regulations (MLR). 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."
The FCA statement added that the UK Upper Tribunal had turned down Gidiplus' application to continue crypto ATM operation. The judge explained that Gidiplus didn't present enough evidence to support how it will run without violating the set regulations.
"The Upper Tribunal recently ruled against Gidiplus […] pending the Upper Tribunal's determination of its appeal against us refusing 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'," a section of notice read.
Less than 35 firms can offer crypto-related services
In January 2020, the financial watchdog specified that all entities seeking to carry out crypto-related activities must adhere to Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. The firms must also seek registration with the regulator.
A total of 298 firms (at the time of writing) have applied for registration since, with 244 of them seeing their applications rejected. The FCA site shows that 33 firms (as of March 11) have received approval to operate in the country, but none have been granted the license to run crypto-cash machines.
The remaining firms have been granted temporal registration, which implies that their applications have not been turned down. The FCA categorically warns that firms with this type of registration are not yet deemed 'as fit and proper.'
Interestingly, the UK has Bitcoin ATMs in 80 locations per Coin ATM Radar with more than half in the capital. Only nine countries have more functioning cryptocurrency ATMs than the UK.