UK FCA Charges First Individual for Illegal Crypto ATM Network

Britain’s Financial Conduct Authority (FCA) announced on September 10 that it had charged Olumide Osunkoya, a 45-year-old London resident, for unlawfully operating crypto ATMs. This marks the first time an individual has been prosecuted for running these machines without FCA registration.

The charges come as part of the FCA’s efforts to combat illegal crypto ATMs across the UK, working closely with law enforcement agencies. These machines, which allow users to buy or convert money into crypto assets, have been linked to criminal activity such as money laundering and terrorist financing.

UK FCA Cracks Down: London Man Faces Charges for Illegally Operating Crypto ATMs

Osunkoya is accused of managing crypto ATMs and processing £2.6 million ($3.4 million) transactions from December 2021 to September 2023.

The FCA’s statement emphasized the risks associated with illegal crypto ATMs, noting that criminals can exploit such machines to launder money globally.

In addition to two charges under MLRs, Osunkoya faces charges under the Forgery and Counterfeiting Act 1981 for creating false documents during his operations and a charge of possessing criminal property under the Proceeds of Crime Act 2002.

Osunkoya first acted as a director of Gidiplus Ltd and later as a sole practitioner, allegedly operating without FCA oversight.

“If you’re illegally operating a crypto ATM, we will stop you. If you’re using a crypto ATM, you are handing your money directly to criminals,” Therese Chambers, the FCA’s joint executive director of enforcement and market oversight, warned.

Osunkoya is set to appear in Westminster magistrates court later this month, facing charges under money laundering, terrorist financing, and transfer of funds regulations.

The FCA continues to warn the public about the high risks associated with cryptocurrencies, which remain largely unregulated in the UK. The watchdog advises that anyone investing in crypto should be prepared to lose their entire investment.

With an 86% Rejection Rate, Is the UK Shutting Its Doors on Crypto?

The FCA has been tightening its grip on the crypto sector, disrupting 26 illegal crypto ATMs across the UK last year. This move is part of broader European efforts to curb unregulated crypto activity, such as Germany’s recent seizure of nearly €250,000 in a crackdown on crypto ATMs.

Since February 27, the FCA has not registered any new crypto firms, marking over six months without approvals. The regulator’s oversight of anti-money laundering and counter-terrorist financing in the crypto sector, which began in January 2020, has seen an 86% rejection rate of applications.

Recent enforcement actions include the arrest of Habibur Rahman , 37, the first person in the UK charged with operating an illegal cryptocurrency ATM. Rahman is also accused of laundering $392,557 by converting cash into crypto.

None of the 44 registered crypto companies in the UK have authorization for crypto ATMs, rendering all such machines illegal.

The FCA has intensified its crackdown on illegal crypto ATMs, with notable raids conducted in Exeter, Nottingham, and Sheffield in May 2023. By year-end, the FCA had conducted 34 inspections .

Research by TRM Labs reveals that the cash-to-crypto industry has processed at least $160 million in illicit volumes since 2019, prompting global law enforcement actions.

While the UK has effectively curtailed the crypto ATM market, other regions, like Australia, have seen a dramatic rise.

Australia’s crypto ATMs increased by 1,700% over two years, representing 2.7% of global distribution. Germany also acted recently, seizing 13 crypto ATMs and €250,000 ($279,000) in an anti-illegal crypto operation.