U.K.’s Financial Conduct Authority (FCA) has increased the intensity of its crackdown against illegal digital currency ATMs in the country with a fresh raid in three locations.
The FCA revealed via a press release that it conducted a joint operation with local police departments in Exeter, Nottingham, and Sheffield, where it uncovered several ATMs operating without licenses. The financial regulator announced that it had taken enforcement action against the ATM service providers in the region as it continues its long-drawn crusade.
“Besides disrupting unregistered crypto businesses, the joint efforts have helped raise awareness of illegally operated crypto ATMs in the UK among the public.,” Therese Chambers, a director with the FCA, said. “This is especially important as crypto products are high risk and not currently regulated.”
The press release failed to disclose the number of ATMs shut down in the joint operation, but Chambers noted that the recent moves had drawn attention to the risks associated with their activities. Data from CoinATMRadar indicate that there are 17 digital currency ATMs operating in the U.K., but the FCA rebutted that it had not issued any firm with operational licenses to operate in the country.
Digital currency exchanges allow users to buy and sell digital currencies for cash, but regulators remain wary of the offering given its affinity with industry bad actors. Law enforcement agencies allege that ATMs provide digital currency scammers a way to launder stolen funds, blurring the trail of investigators.
“Criminals will use crypto ATMs to launder illegally obtained cash, so we were pleased to assist our colleagues at the FCA in targeting businesses in the region displaying these machines without authorization,” said Peter Highway, an official at the South West Regional Organized Crime Unit (SWROCU).
The recent moves come on the heels of the FCA exercising its enforcement powers to inspect several areas of East London for illegal digital currency ATMs in collaboration with the Metropolitan police. In February, a similar action was taken in Leeds, with the FCA confirming that it will be upping its intensity throughout the rest of the year.
FCA throws its weight behind sterner regulations
The FCA has issued several warnings against investors in digital currencies on the grounds that it lacks sufficient regulatory oversight over the industry to provide adequate protection for investors. Several attempts have been made to arm the FCA with oversight powers, but despite their absence, the regulator has earned a reputation for its public advisories.
Apart from cracking down on ATMs, the FCA has warned celebrities and influencers to conduct due diligence to avoid promoting scam digital currency products to their users. In April, the FCA urged service providers to collaborate with regulators “to shape our rules and regulations to benefit markets, consumers, and firms as crypto goes from niche to mainstream.”
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