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‘People should be prepared to lose all their money’: Crypto ATMs are illegal and must shut down, says U.K.’s version of SEC

March 11, 2022, 5:34 PM UTC

Any crypto ATMs operating in the U.K. must shut down, the country’s Financial Conduct Authority said Friday.

None of the crypto exchanges registered with the FCA have been approved to offer crypto ATM services, the financial regulator said, “meaning that any of them operating in the U.K. are doing so illegally, and consumers should not be using them.”

According to data from Coin ATM Radar, there are about 80 crypto ATMs in the U.K.

Crypto ATM machines are similar to regular ATMs. Consumers pay a fee to exchange fiat currency into cryptocurrencies like Bitcoin or Ether. Because of their similarity to regular ATMs, crypto ATMs can serve as a familiar way for people to invest in cryptocurrency. 

Crypto ATMs have drawn controversy in the past. Earlier this year, the U.S. Government Accountability Office—an independent, nonpartisan agency that works for Congress—said in a report that crypto ATMs should be more closely regulated because of the risk that they could be used to facilitate human trafficking and drug dealing. In January, the Monetary Authority of Singapore outlawed crypto ATMs as part of its crackdown on advertising cryptocurrencies.

In its statement, the FCA referenced the crypto ATM provider Gidiplus, which was rejected from registering its business by the regulatory agency. The company later appealed to the Upper Tribunal, a court that hears appeals in the U.K., in an attempt to continue operations, but saw its appeal denied by a judge for “lack of evidence as to how Gidiplus would undertake its business in a broadly compliant fashion,” the FCA said in its statement. 

Crypto ATMs have proliferated around the world in the past year, according to Coin ATM Radar. The number of crypto ATMs available worldwide is now 36,357, up 159% from the 14,031 ATMs available at the beginning of last year. About 0.2% of all crypto ATMs globally are located in the U.K., according to Coin ATM Radar.

The FCA said it will contact companies operating crypto ATMs and instruct them to shut the machines down, or face further action. 

“We regularly warn consumers that crypto assets are unregulated and high-risk, which means people are very unlikely to have any protection if things go wrong, so people should be prepared to lose all their money if they choose to invest in them,” the FCA statement read.

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