The Financial Conduct Authority, the UK’s regulator responsible for banking, recently ordered all cryptocurrency ATMs in the country shut down. Why? Because nobody operating a crypto-ATM in the UK actually has a license to do so.
BBC News – Bitcoin cash machines ordered to shut down in UK
A cryptocurrency ATM functions much like a regular bank machine dispensing ‘real’ dollars, pounds and euros in return for bitcoin, ethereum or monero. However, there are no bank accounts or even banks involved. To use the ATM, all you need is a crypto wallet.
If this sounds like DeFi utopian bliss, ask yourself where the cash in those ATMs comes from.
Get real
People started using bitcoin to buy drugs online over the Dark Web 15 years ago. Today, hackers conducting ransomware attacks demand payment in crypto, and Russian oligarchs are using crypto to evade sanctions. Drug dealing, evading sanctions and hacking are criminal offences, however, crypto-ATMs enable criminals to cash-in.
Organized crime has always done business in cash because it’s tough for law enforcement to track. The problem is ‘laundering’ the money. Criminals, hackers and oligarchs are not interested in cryptocurrency as a digital libertarian means of payment, they are interested in crypto because they have so much cash to clean. What better way than a crypto-ATM?
Imagine a gang of drug dealers in Manchester buying an ATM and filling it with the drug money they made selling Fentanyl-laced heroine, and dispensing it to middle-class speculators looking to finally cash in on cryptocurrency investments – for a percentage fee, of course. Then, the gang exchanges all their newly-received crypto for fresh Euros at another crypto-ATM in Malta or Switzerland. Voila! Pristine money, easy-peasy!
Achilles’ Heel
are opposed to unregulated cryptocurrencies. I believe they are right to shutter crypto-ATMs and demand oversight and transparency. If you want to buy real things in the real world you need real money. Crypto-ATMs are an easy way to exchange virtual for real dollars, totally anonymously.
I’ve been saying for years that cryptocurrency is a fool’s bet because the tokens have no real value behind them, and crypto’s dodgy relationship with the criminal underworld.
If you are a cryptocurrency investor you should ask yourself: just how ethical is the system I support? If you’re in the UK, perhaps book a plane ticket to another country where the crypto-ATMs still exist. I hear Russia has plenty, if you’re happy with rubles.