TL;DR:
- The FCA and Met Police are cracking down on illegal Bitcoin ATMs in East London.
- No Bitcoin ATMs currently operating in the UK are registered with relevant authorities, according to an FCA announcement from March 2022.
- Bitcoin ATMs saw a surge in popularity in 2021 but have since seen a decline, with 1,054 Bitcoin ATMs closing down between February and March 2023.
Bitcoin ATMs have become a popular way for people to buy and sell Bitcoin using cash. They are essentially physical kiosks that allow users to deposit cash in exchange for Bitcoin, or vice versa. These machines are usually located in public places such as shopping centers, convenience stores, and gas stations.
How do Bitcoin ATMs work?
Bitcoin ATMs work by connecting to the internet and using a Bitcoin wallet to facilitate transactions. When a user wants to buy Bitcoin, they insert cash into the machine and scan their Bitcoin wallet’s QR code. The ATM then sends the Bitcoin to the user’s wallet. Conversely, if a user wants to sell Bitcoin, they scan the QR code of their wallet on the ATM, and the machine dispenses cash.
Most Bitcoin ATMs charge a fee for their services, usually ranging from 3% to 8%. This fee covers the cost of maintaining the machine, as well as the cost of buying and selling Bitcoin.
Major companies that use Bitcoin ATMs
One of the major manufacturers of Bitcoin ATMs is General Bytes, which accounts for 25.2% of the global Bitcoin ATM market share. General Bytes has the most ATM installations worldwide, but they have not responded to queries from Decrypt about the FCA’s recent crackdown.
Another major Bitcoin ATM operator is Kwik-Bit, which previously operated in London but has since closed down. Other Bitcoin ATM operators listed in London have not responded to queries, or their listed numbers are disconnected.
Bitcoin ATM usage in the UK
he UK Financial Conduct Authority (FCA) has continued its crackdown on illegal Bitcoin ATMs in East London, targeting unregistered crypto ATM businesses alongside the Metropolitan Police. According to the FCA, no Bitcoin ATMs presently operating in the UK have been registered with the relevant authorities, meaning every Bitcoin ATM in the UK is operating illegally. This latest development follows similar raids conducted in Leeds earlier this year. The FCA and the police will continue to identify and disrupt unregistered crypto ATM businesses in the UK. Despite the popularity of Bitcoin ATMs in 2021, the trend has since reversed, with 1,054 Bitcoin ATMs closing down between February and March 2023 alone. CoinATMRadar reports that there are currently 1,469 Bitcoin ATMs operating in the European region, of which just 18 are operational in the UK.
The UK government has laid out plans to make the UK a global crypto asset technology hub, with a comprehensive plan presented by Rishi Sunak in early 2022. Following this, the UK parliament introduced the Economic Crime and Corporate Transparency Bill, which extended police powers to make it easier to “seize, freeze and recover” crypto assets in a bid to combat money laundering. In addition, the Bank of England has launched a consultation regarding the design of a digital pound that could be in use by the late 2020s. Several UK-based banks have also toughened their approach to crypto usage by their customers in the wake of the collapse of FTX last year, with many now refusing to process crypto purchases.
Popular option but maybe not legal
The popularity of Bitcoin ATMs surged in 2021 in tandem with the cryptocurrency market’s rise to all-time highs. However, the trend has since reversed, with 1,054 Bitcoin ATMs closing down between February and March 2023 alone. Currently, there are only 18 Bitcoin ATMs operating in the UK, compared to 32,164 in the United States.
Bitcoin ATMs have become a popular way for people to buy and sell Bitcoin using cash. However, the FCA’s ongoing crackdown on illegal Bitcoin ATM businesses in the UK highlights the need for regulation in the cryptocurrency industry. While the UK government has expressed a desire to become a “global crypto asset technology hub,” recent legislation such as the Economic Crime and Corporate Transparency Bill indicates that the government is taking steps to combat money laundering and other criminal activities involving cryptocurrency.
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