It’s been less than two months since blockchain analytics firm Elliptic published a report detailing its predictions for this year’s crypto regulations. Sanctions in the cryptocurrency space will increase through 2023, as regulators around the world will step up their oversight of the industry, the company said.
The Elliptics report has begun to unfold as regulators launch a series of enforcement actions around the world. For example, a recent report revealed that the Financial Conduct Authority (FCA) has taken action against unregistered crypto ATM operators in the United Kingdom (UK).
According to the FCA report, the U.K. regulator has investigated several locations in Leeds where it suspects illegal cryptocurrency ATM operations. The FCA worked with West Yorkshire Police's Digital Intelligence Unit and its investigative unit to gather evidence from across the city. According to their observation, all crypto ATMs in the UK are unlicensed.
In a statement, the FCA’s executive director of enforcement and market surveillance, Mark Steward, said the regulator would continue to go after unregistered crypto businesses in the UK.
The executive emphasized that all ATM operators, including crypto ATMs, must be registered with the FCA and comply with UK money laundering rules. Crypto products are "high-risk assets" and "lack of regulation," he added. Therefore, anyone who invests in them could lose money, according to government officials. Deputy Sergeant Lindsey Brants of West Yorkshire Police Force's cyber team also commented. According to Brants, recent investigations allowed them to identify the locations of several live crypto ATMs. The official also noted that regulators issued cease and desist orders to operators. The regulator also warned that breaches would invite investigations under money laundering rules.
Constable Brants noted that the Force Cyber Team were delighted to be working with the FCA in what they described as "West Yorkshire's first cryptocurrency enforcement operation". UK authorities are working with a number of law enforcement agencies, including local police forces, to disrupt and disable unregistered crypto ATMs.
Additionally, the report indicated that the FCA had previously sent letters to all crypto ATM operators and hosts, warning them of “imminent” consequences if they failed to register with the regulator. The FCA’s recent actions against cryptocurrency ATMs will affect many operators.
According to Coin ATM Radar, as many as 28 locations in the UK offer the machines. The data shows that more than 50% of crypto ATM locations are located in London, with many more around Birmingham, Manchester and Nottingham.
The UK’s latest enforcement action against cryptocurrency ATMs is not the first by the FCA. In March 2022, regulators issued a similar Bitcoin ATM ban. In its order, the FCA asked all unregistered ATMs to close immediately or face additional enforcement action. The recent FCA enforcement action comes against the backdrop of global financial watchdogs stepping up oversight of cryptocurrencies. Recently, some cryptocurrency companies have faced multiple enforcement actions from U.S. regulators.
For example, in a recent report, the New York Department of Financial Services (NYDFS) ordered Paxos to stop minting and issuing its BUSD after some investigations.
Additionally, Coinbase and Kraken face enforcement actions from the NYDFS and the SEC. In the report, the NYDFS went after cryptocurrency exchange Coinbase, accusing the company of failing to comply with anti-money laundering and know-your-customer (KYC) standards. As a result, New York regulators demanded a $100 million fine from the cryptocurrency exchange.
