The Financial Conduct Authority (FCA) in the U.K., an independent agency that regulates financial markets and protects customers, has announced that all non-registered Bitcoin (BTC) ATMs must be immediately closed down or face enforcement action.
Bitcoin ATMs are the best way to anonymously purchase BTC in person. They are becoming increasingly popular as more and more people adopt the crypto as a form of digital currency. BTC ATMs are different from traditional ATMs in that they send transactions across the blockchain and into the ATM user’s wallet.
While it will be interesting to see how the FCA’s termination order plays out in the coming days and weeks in terms of its impact on the growing cryptocurrency industry in the U.K., the regulator’s stern order to BTC ATM operators to “shut down or face further action,” has really come as a surprise to many within the industry.
Lack of Regulatory Mechanism
The agency cited a lack of a regulatory control mechanism, the high-risk potential of transactions without certain safeguards and the risks of non-complying with the principles established within the Money Laundering Regulations (MLR) framework as the primary reasons for the enforcement. In other words, the FCA’s statement underlines the fact that without a clear and strict regulatory structure, companies are free to take risks that could potentially harm consumers.
“We are concerned about crypto ATM machines operating in the UK and will therefore be contacting the operators instructing that the machines be shut down or face further action”, the FCA said.
It should be noted that while the watchdog recommended stricter regulations be put in place, it has granted registration approvals to more than 30 companies since Aug. 2020 under their MLR principles. Some notable ones include: Gemini Europe, Kraken‘s holding co. Payward Ltd and more recently added to the list eToro/UK Ltd.
Bitcoin was last changing hands below $39,200, down about 0.30% on the day.