Crypto ATM Money Laundering: UK Operator Pleads Guilty to FCA Charges

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As a seasoned crypto investor with over two decades of experience in the financial markets, I find the recent case of Olumide Osunkoya, a UK resident who pleaded guilty to operating unregistered cryptocurrency ATMs, a stark reminder of the wild west nature that still persists in the crypto space.

As an analyst, I find myself reporting that I am the first individual in the United Kingdom to admit guilt for illegally operating cryptocurrency Automated Teller Machines (ATMs). This groundbreaking case highlights a significant step forward in regulating the use of such machines within our legal system.

A 45-year-old resident from London admitted his guilt in Westminster Magistrates’ Court for operating unregistered cryptocurrency Automated Teller Machines (ATMs), forging documents, and holding assets acquired through illegal activities.

FCA Warns: Crypto ATMs “Handing Money to Criminals”

More recently, the Financial Conduct Authority (FCA) in the UK levied charges against Olumide Osunkoya for operating at least 11 unlicensed cryptocurrency Automated Teller Machines (ATMs). Over a period from December 2021 to September 2023, transactions worth approximately £2.6 million were carried out through these ATMs. Despite his FCA registration application being rejected in 2021, Osunkoya continued to grow his network of cryptocurrency ATMs located within retail convenience stores across the UK.

As a responsible crypto investor, I should always ensure I perform thorough background checks on clients and verify their sources of funds. Failure to do so could potentially enable money laundering and tax evasion activities.

As stated by Therese Chambers, who serves as joint executive director for enforcement and market oversight at the FCA, the warning is unequivocal: individuals running these illegal machines will be apprehended, and anyone utilizing them is essentially funneling their funds straight into the hands of criminal elements.

Approximately four weeks ago, the Financial Conduct Authority (FCA) announced it was prosecuting a 45-year-old man for running an unauthorized cryptocurrency venture; this is the Osunkoya case. The court hinted that he likely amassed significant wealth due to transaction margins ranging from 10% to 60%. It’s been alleged that he fabricated a false identity and claimed to have sold an ATM network to a nonexistent person, in order to bypass FCA regulations.

Possible Sentence – 25 Years in Prison

This instance marks the initial criminal lawsuit brought forth by the Financial Conduct Authority (FCA) against unregistered crypto asset actions, which violate the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2017. Additionally, it signifies the first accusations for managing such digital currency devices in the United Kingdom.

Osunkoya might spend between two years and no more than ten years behind bars for operating unregistered ATMs, as well as face imprisonment for up to fourteen years due to charges of property crime possession. The sentencing hearing will take place at Southwark Crown Court on a date yet to be announced.

The conviction comes at the time when regulators around the world are struggling to cope with the rapidly changing landscape around cryptocurrencies. At present, there are no legal crypto ATM operators in the UK because every such machine must be registered with the FCA to operate lawfully.

Over the years, the Financial Conduct Authority (FCA) has been actively collaborating with law enforcement to tackle the issue of illegal devices found in the UK. In 2023 alone, their investigations led them to inspect 34 locations under suspicion. As a result, they successfully seized and shut down 26 machines that were operating unlawfully.

$110 Million Lost to Scams This Year

Although the UK’s Financial Conduct Authority (FCA) is working to stop the operation of unlawful crypto Automated Teller Machines (ATMs), these machines are widely popular in numerous other countries. For instance, the United States alone has approximately 31,000 installed devices that facilitate users with an effortless process for buying and selling cryptocurrencies.

Although worries about money laundering and undesirable activities persist, many advanced countries have enacted rules aimed at minimizing these risks.

It’s been observed that Cryptocurrency ATMs are increasingly being used by scammers, as indicated by data from the U.S. Federal Trade Commission.

This year, it’s been estimated that users have fallen victim to crypto ATM scams, resulting in a staggering loss of $110 million. Emma Fletcher, a senior data analyst at the FTC, commented on this trend, stating that these machines are being exploited by scammers more than ever before, with an unprecedented increase in fraudulent activities compared to previous years.

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2024-09-30 17:30