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FCA to Close Down Crypto ATMs in the UK

UK’s Financial Conduct Authority ordered crypto enterprises in the country to cease ATM services immediately. 

This order applies to all 81 crypto ATMs installed in the United Kingdom. The FCA warned that organizations failing to comply with this command promptly would face severe punishment. 

According to the FCA, none of these companies have a license to offer on-ramp or off-ramp services. Thus, firms providing these cash-dispensing machines have to register with the FCA first to obtain authorization, they said in a statement on Friday. 

FCA claims it hasn’t given license to any crypto firms offering ATMs for digital asset exchanges. Therefore, providing the service and utilizing it are both illegal operations.

Bitcoin ATMs have risen in numbers in UK in the past year. Crypto ATMs in the country and elsewhere are quite similar to traditional ATMs.  That is, the machine converts a requested amount of digital assets to fiat currency. In effect, crypto holders can walk up to any ATM location and withdraw money in pounds. 

Residents can locate these ATMs around convenience stalls, supermarkets, and malls around the UK. 

Background of Crypto Machine Dismissals in the UK

Gidiplus, a company offering crypto-cash machine withdrawal services, applied for a license from the FCA. Gidiplus had intended to run Crypto ATM services based on the requirements of Money Laundering Regulations. However, the FCA denied the application. 

Upper Tribunal, the Administrative Appeals Chamber, denied Gidiplus’s follow-up appeal against the FCAs initial ruling. As a part of the appeal, the company had asked for permission to continue trading operations while awaiting the court’s decision.

This chain of events forms the backdrop of the crypto ATM dismissal. The Tribunal turned down the appeal because Gidiplus could not prove its ability to conduct these operations within legal requirements. Additionally, the UK Justice System identified the same dangers in companies offering crypto ATM services. To curb the potential use of these mediums to practice money laundering, the FCA ordered their total shut down.  

Since centralized financial institutions flag and report irregular activities, crypto has been exploited for its anonymity. There are fears that crypto ATMs could help to covertly launder funds by offering undetectable means to perform such transactions. Regulators, becoming more concerned by the day are hacking down on potential routes exploited by ill-meaning users. 

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According to reports, some UK-based firms have adhered to the warnings from authorities. At writing, about 110 concerned firms have closed business.

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