The Financial Conduct Authority has warned consumers that they could lose all their money if they use crypto ATMs in the UK.
The regulator said today (July 11) it has inspected 34 locations across the UK suspected of hosting crypto ATMs as part of a co-ordinated operation with other law enforcement agencies.
The FCA said it has disrupted 26 machines operating unlawfully.
Cryptoasset exchange providers must be registered with the FCA and comply with UK money laundering regulations, which includes operators of crypto ATMs, and failure to comply can result in up to two years in prison, a fine, or both.
Steve Smart, joint executive director of enforcement and market oversight at the FCA, said: “If you use a crypto ATM in the UK, you are using a machine that is operating illegally and you may be handing your money over to criminals.”
Smart added consumers are not protected if something goes wrong, and they can lose their money.
“It is also unlikely you will be able to contact the operator of the machine to resolve any problems you may have. Often, we see no effective channels of communications for people to get in touch with the operator.”
The FCA used a case study example of a member of the public contacting the Citizens Advice Bureau after paying £1,000 into a crypto ATM in Sheffield.
After attempting to buy crypto with the machine, the ATM told the customer the transaction was not successful, but no funds were returned, with shop staff unable to help or provide any guidance.
The person operating the crypto ATM affixed a contact number to the machine as a single point of contact, only reachable through WhatsApp, and the member of public was unable to make contact with the operator of the machine and get their funds returned.
The FCA said following its inspection, the crypto ATM at this location is no longer in operation.
sally.hickey@ft.com
