By Alicia Maher
The UK’s financial watchdog (the FCA) has notified owners of all crypto ATMs to stop operations. Part of the notification states that the FCA would enforce the closure of any ATM whose owners fail to comply with the directive. According to the FCA, it is now mandatory for crypto ATM owners to register with the agency and attest to compliance with the country’s anti=money laundering policy.
Comply Or Stop Operations
Coin ATM radar (a platform that tracks the number of operational crypto ATMs globally) revealed that there are 82 BTC ATMs in the UK. While most of these crypto ATMs can be found in supermarkets and convenience stores, the FCA also indicated that such crypto ATMs were not exempted from the new rule.
The FCA further stated that “there are more than ten crypto ATMs in supermarkets and convenience stores, but none of them have any FCA-issued operating license. Thus, we have also asked them to shut down their operations.”
The FCA statement further read, “we repeatedly warn the populace about the huge volatility and the lack of regulation of the crypto space. Hence, if anything goes wrong with their investment, there is no way they can seek redress, and their money will be lost forever. However, if after these warnings, they still choose to invest in any crypto-related investments, that shows they are prepared for the outcome of their choices even if it is negative.”
Recently, a judicial review threw away an attempt by GidiPlus (a crypto ATM owner) to overturn the FCA’s decision not to grant it an operating license. According to the judge, “Gidiplus failed to prove beyond reasonable doubt that it can comply with the FCA’s terms for running such business.”
The FCA’s Heavy Crackdown On The Crypto Market
The FCA claims that it has issued licenses to only 32 firms, with 21 of them given a temporary operating license which will expire by this month-end. Any crypto platform that wishes to trade by the beginning of next month must request a renewal of its temporary operating license from the FCA.
You’d recall that the UK recently imposed greater restrictions on crypto-related adverts. The nation’s advert regulator (advertising standards authority, ASA) has shut down many crypto promotions following the updated advert policies. Worthy of note is a famous coin advert which the ASA shut down this past week.
Losing A Sizable Chunk Of The Crypto Market
Last week, a top crypto market player in the UK (BSC2 ltd) announced that it wouldn’t renew its temporary operational license with the FCA. They further stated that they’re making efforts to ensure that their client’s activities aren’t seriously affected. Revolut and Copper (two other top crypto market players in the UK) may also follow the path of BSC2 ltd as they also have a temporary operating license.
Suppose these two companies also decide that the FCA’s AML policies are too strict for their business operations, and they quit the UK scene. In that case, the UK’s crypto market may be crippled with severe negative ramifications. While the FCA may assume that it is taking the proper regulatory steps, it needs to consider the fast-growing adoption of cryptos in the world financial system. It may want to tread carefully before a complete clampdown on crypto activities in the country.