UK authorities are intensifying their crackdown on cryptocurrency ATMs (CATMs) amid growing concerns about illicit financial activities. In a recent operation, the Financial Conduct Authority (FCA) and the Metropolitan Police Service seized seven crypto ATMs and arrested two individuals suspected of money laundering and operating an illegal crypto exchange. The operation involved searching four premises across southwest London.

The FCA has been clamping down on unregistered crypto ATMs since 2022. As of March 2022, the FCA instructed operators of crypto ATMs to shut down their machines or face enforcement action. The FCA has made it clear that there are currently no legally operated crypto ATMs in the UK. The agency considers the use of such machines as supporting crime.

The FCA requires businesses conducting crypto-asset activities in the UK to register with them under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs). They must also comply with anti-money laundering regulations. Failure to comply with these regulations can lead to criminal charges, including imprisonment, fines, or both.

The FCA's enforcement actions have significantly reduced the number of crypto ATMs in the UK. According to the FCA, the number of crypto ATMs advertised on Coin ATM Radar in the UK has fallen from over 80 in 2022 to zero in 2024. In 2023, the FCA investigated 38 locations and disrupted 30 machines.

The recent crackdown also extends to individuals operating unregistered crypto ATM businesses. In September 2024, the FCA charged an individual for running crypto ATMs that processed millions in crypto transactions without the required registration. The individual pleaded guilty and was sentenced to four years in prison.

The FCA is working with law enforcement agencies to combat financial crime and protect consumers. The Metropolitan Police Service's cryptocurrency team is committed to addressing the growing threat of cryptocurrency misuse.

Other countries are also taking steps to regulate crypto ATMs and prevent fraud. For example, in the U.S., states like Wisconsin are considering new legislation to protect consumers from crypto ATM fraud. At the federal level, the Crypto ATM Fraud Prevention Act has been introduced to implement similar requirements. These include employing a chief compliance officer, developing an anti-fraud policy, and requiring "live, verbal confirmation for any transaction greater than $500".

As the legal framework evolves, operators need to ensure full compliance or face enforcement action. The FCA's message is clear: illegal crypto ATMs have no place in the UK's financial landscape, and the crackdown has only just begun.