The UK’s Financial Conduct Authority (FCA) recently shut down 26 cryptocurrency ATMs operating on the country’s territory. The regulator claimed that the ATMs were offering illegal services in the UK.
According to the authority, the machines in question have been offering people to buy cryptocurrencies illegally. They warned investors that their money could be lost if they engaged in crypto transactions using ATMs.
The report from July 11th said that the decision was made after several incidents that took place in specific parts of the country. One individual allegedly lost their money only one day before deciding to use a crypto ATM to transact money. The user supposedly paid a thousand pounds but never received the cryptocurrencies they purchased. In addition, they also didn’t get their money back, nor was it uploaded to their wallet.
The UK government cannot protect ATM users if they lose money
The joint executive director of FCA’s enforcement and market oversight, Steve Smart, warned the crypto community of the dangers involved with using ATMs. He 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.”
After investigating the matter, the regulator announced its decision to take action against crypto machines, believing that they are putting their customers in danger of losing money. The regulator started by identifying all the locations that house crypto ATMs, and it inspected 34 regions that allegedly hosted the machines at any point in 2023.
The inspection resulted in a disruption of 26 crypto ATMs that were operating illegally. The ATMs were found in multiple locations.
The executive director once again stressed that the public must be vigilant when using machines to conduct their crypto transactions. Given the lack of cryptocurrency and crypto ATMs regulations, he specifically warned that UK authorities could not protect the users if they lose money by interacting with the machines.
“You will not be protected if something goes wrong, and you could lose your money,” he warned.
The UK is working on crypto laws, but there is a lot more to do
The new move came as only one of the endeavors that the UK has taken to necessitate extensive laws that would adequately regulate the crypto industry. Unlike the US — which made little to no effort, as the SEC claims that the crypto industry is regulated via the existing securities regulations — the UK recognized the need for the new laws.
But, with the crypto industry still being new and rapidly developing, even a nation actively trying to regulate the sector cannot cover all its aspects simultaneously. The local lawmakers had to prioritize some things over others, which resulted in the lack of laws for things like crypto ATMs at this time.
However, the UK’s Treasury Department did announce the release of proposals regarding crypto regulations in February of this year. Furthermore, the FCA introduced a series of rules regarding crypto assets’ marketing last month. Even so, many laws and rules still have yet to be considered, created and voted on before they can come into effect.