An alleged operator of multiple crypto ATMs has been charged in the first prosecution of an unregistered cryptoasset by the Financial Conduct Authority. Crypto ATMs, which purport to convert money into crypto assets, are illegal in the UK, though a handful appear to be still operating - down from around 270 in 2020. 

In a statement today, the FCA said it had charged Olumide Osunkoya, 45, with running crypto ATMs which processed £2.6m across multiple locations between 29 December 2021 and 8 September 2023 without the required registration. The charges mark the FCA’s first criminal prosecution relating to unregistered cryptoasset activity under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLRs). These are also the first charges brought against a person accused of running a network of crypto ATMs in the UK.

London resident Osunkoya is also charged with two offences under the Forgery and Counterfeiting Act 1981 and an offence of possession of criminal property under the Proceeds of Crime Act 2002. He will appear before Westminster Magistrates’ Court on 30 September.

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Therese Chambers, joint director of enforcement and market oversight at the FCA said: 'Our message today is clear. 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. Criminals can exploit crypto ATMs to launder money globally.'

Since 2020, businesses intending to provide cryptoasset services that come within the scope of the money laundering regulations have been required to register with the FCA. No crypto ATM operator has yet done so. 

At least one specialist lawyer described the prosecution announcement as 'a distraction from the real challenges faced by the FCA in regulating cryptoassets'. Even at their peak, crypto ATMS served only a niche market, said Nick Barnard, partner at city firm Corker Binning.

'The FCA is at a difficult crossroads, Barnard said. 'Whilst cryptoassets are not themselves within the regulatory perimeter, they are covered by the Financial Promotions Regime and all UK cryptoasset businesses are required to be registered with the FCA under the Money Laundering Regulations 2017. Whilst the extent to which the FCA will regulate cryptoassets in the future remains to be seen, the scope of its existing responsibilities – including supervising the AML compliance of all UK crypto businesses - should not be underestimated. Given the estimated value of cryptoasset activity in the UK is measured in hundreds of billions, crypto ATMs should be the least of the FCA’s worries.'

 

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