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United Kingdom’s top regulatory enforcement agency continues its campaign against unregistered crypto ATMs, investigating several sites in East London.
The Financial Conduct Authority (FCA), a financial sector regulatory body in the U.K., recently exercised its enforcement powers to inspect several sites in East London for unregistered digital asset ATMs in a joint operation with the Metropolitan Police.
“Crypto ATMs operating without FCA registration are illegal and, as today shows, we will take action to stop this,” said Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA. “This operation, alongside last month’s action in Leeds, sends a clear message that we will continue to identify and disrupt unregistered crypto businesses in the U.K.”
This latest action follows February’s operation in Leeds, where the FCA gathered evidence from several sites around the city with West Yorkshire Police’s Digital Intelligence and Investigation Unit to find and shut down unregistered digital asset ATMs.
“Crypto ATMs” allow people to buy or convert money into digital assets, and in the U.K., they must register with the FCA for anti-money laundering purposes to operate legally.
There are currently no digital asset ATM operators registered with the FCA, but the organization suspects they continue to operate in various locations across the country illegally, hence the enforcement actions this week and in previous months, which were carried out using investigative powers under the Money Laundering Regulations 2017.
The FCA is currently working with the National Economic Crime Centre to clamp down on operators of illegal ATMs, and the regulator continues to caution consumers about the risks involved in digital assets.
“Crypto products are not currently regulated, and they are high risk. You should be prepared to lose all your money if you invest in them,” warned Steward on Wednesday.
The FCA said it will review evidence gathered during these visits and consider taking further action where necessary, “we will continue to identify and disrupt unregistered crypto businesses operating in the U.K.”
Digital asset’s on the U.K. agenda
The ramping up of digital asset enforcement activity by the FCA is in keeping with the U.K.’s increased focus on regulating the industry.
“Our robust approach to regulation mitigates the most significant risks while harnessing the advantages of crypto technologies,” said the U.K. Treasury department on February 1, when it published its consultation and called for evidence on proposals for the future financial services regulatory regime for digital assets.
The Treasury’s proposal focuses on establishing a regulatory framework “consistent with its approach to traditional finance.”
These proposals would include extending the scope of U.K. regulatory coverage (to regulate activities such as payment, exchange, investment, and risk management); establishing an issuance and disclosure regime for digital assets; requiring trading venues to define the detailed content requirements for admission and disclosure documents; further regulating digital asset intermediation activities; and imposing digital asset specific market abuse requirements.
When announcing the consultation proposal, Economic Secretary to the Treasury, Andrew Griffith, said, “we must also protect consumers who are embracing this new technology—ensuring robust, transparent, and fair standards.”
The consultation will close on April 30, 2023, after which the Treasury stated that it would consider feedback and set out its response.
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