Crypto ATMs in Leeds: Financial Conduct Authority issues warning to illegal cryptoasset exchange providers

The illegal use of unregistered crypto ATMs in Leeds has come under scrutiny after specialist investigators visited several suspected sites in the city.
Georgina Morris
By Georgina Morris
Published 15th Feb 2023, 04:45 GMT
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The Financial Conduct Authority (FCA) said it had used its powers to enter and inspect a number of locations that are suspected of hosting illegally operated crypto ATMs. Its investigators gathered evidence as part of a joint operation with West Yorkshire Police’s Digital Intelligence and Investigation Unit.

Crypto ATMs are machines which allow customers to buy or convert funds into cryptoassets, a store of value which can be transferred or exchanged digitally. Cryptoasset exchange providers in the UK – including crypto ATM operators – must be registered with the FCA and comply with the UK Money Laundering Regulations.

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There are currently no crypto ATM operators with FCA registration. The authority previously wrote to all operators and hosts warning of the legal consequences of failing to register and now it is working with multiple law enforcement partners, including local police forces, to pursue any illegal operators.

The authorities are investigating cryptoasset exchange providers suspected of operating illegally in Leeds. Picture: Phongphan Supphakank/AdobestockThe authorities are investigating cryptoasset exchange providers suspected of operating illegally in Leeds. Picture: Phongphan Supphakank/Adobestock
The authorities are investigating cryptoasset exchange providers suspected of operating illegally in Leeds. Picture: Phongphan Supphakank/Adobestock

Mark Steward, executive director of enforcement and market oversight at the FCA, said: “Unregistered Crypto ATMs operating in the UK are doing so illegally. We will continue to identify and disrupt unregistered crypto businesses operating in the UK. Crypto businesses operating in the UK need to be registered with the FCA for anti-money laundering purposes. However, crypto products themselves are currently unregulated and high-risk, and you should be prepared to lose all your money if you invest in them.”

The investigation taking place in Leeds is thought to be a national first, with the FCA now set to review the evidence gathered and consider further potential enforcement action.

Detective Sergeant Lindsey Brants, of the Force Cyber Team at West Yorkshire Police, said: “Having conducted intelligence gathering work across West Yorkshire, we soon established the locations of several live crypto ATMs. Warning letters were issued requesting the operators cease and desist using the machines and that any breach of regulations would result in an investigation under money-laundering regulations. We then shared our findings with the Financial Conduct Authority.

“We are pleased to be able to work in partnership with the FCA in what we believe is a national first here in West Yorkshire.”