UK’s FCA to clamp down on digital currency ATMs operating without permits

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The Financial Conduct Authority (FCA), has issued a warning to digital currency ATM operators in the United Kingdom to seek registration with the body or cease all operations.

The warning was included in a statement released on February 14 following a joint operation with the West Yorkshire Police’s Digital Intelligence and Investigation Unit. Per the statement, the U.K. financial watchdog has obtained credible intelligence that digital currency ATMs were operating illegally in the region despite multiple warnings.

“Unregistered crypto ATMs operating in the U.K. are doing so illegally,” Mark Steward, an FCA director, said. “We will continue to identify and disrupt unregistered crypto businesses operating in the UK.”

Digital currency ATMs, machines that allow users to convert their fiat currencies into digital assets, have been rising in popularity in the U.K. on the back of the 2021 bull run. According to data from Coin ATM Radar, there are just under 30 ATMs in the U.K., with the bulk being in London, while Manchester, Nottingham, and Birmingham trail behind.

The FCA claims that the law mandates all providers of virtual currency services to seek registration with the regulators, and the requirement extends to virtual currency ATM regulators. To this end, the FCA has sent out warning letters to operators of the ATMs urging them to cease and desist from offering their services to members of the public.

In 2022, the FCA released an advisory against virtual currency ATM operators accompanied by the threat of enforcement actions for failing to obtain proper registration. The agency regularly updates an active list of illegal digital currency service providers as the financial watchdog continues to warn investors that they face the risk of losing all their funds.

Scrambling to comply

Given the FCA’s hard stance towards virtual assets, several service providers operating in digital assets are seizing the bull by the horn to be regulatory compliant. Since the FCA made the announcement for all service providers to gain approval, a total of 41 firms have satisfied the agency’s requirements and anti-money laundering laws.

The approved firms include Gemini, Bitpanda, Revolut, Zodia Custody, Ziglu, Coinpass, and Fidelity. Others include Wintermute, CoinJar, Galaxy Digital, MoonPay, and Skrill, with Archax Ltd being the first to gain approval back in 2022.

Things reached a crescendo after the FCA issued a consumer warning to the largest digital asset exchange in the world, Binance, for failing to comply with the regulatory requirements. The move forced Binance to cease operations in the U.K, signaling the FCA’s resolve to clamp down on all unregulated market activity.

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