British Regulator Charges London Man for Operating Illegal Crypto ATMs
A London man, Olumide Osunkoya, aged 45, has been charged by the Financial Conduct Authority (FCA) for running several unlicensed crypto ATMs. These machines allowed users to either purchase cryptocurrency or convert their money into digital assets without the necessary legal registration. Crypto ATMs are machines similar to the regular ATMs you know, but instead of dispensing cash, they allow the user to buy or sell cryptocurrencies.
Details of the Charges
According to a recent announcement by the FCA, Osunkoya was involved in processing approximately $3.4 million in cryptocurrency transactions through multiple locations between December 2021 and September 2022. The FCA noted that currently, no crypto ATMs are legally registered in the U.K., making any operation of such machines illegal.
Regulatory Actions and Warnings
This case marks the FCA’s first criminal prosecution related to unregistered cryptoasset activity following the 2017 money laundering and terror financing regulations. Therese Chambers, joint executive director of enforcement and market oversight at the FCA, stated, "Our message today is clear. If you’re illegally operating a crypto ATM, we will stop you." She also highlighted the risk of using these machines as they "are handing your money directly to criminals."
Rising Concerns Over Crypto ATMs
The announcement of these charges comes amid increasing warnings about crypto ATMs by regulators on both sides of the Atlantic. Data has shown a significant rise in scams involving bitcoin ATM machines, with consumers losing $114 million last year—a dramatic increase from previous years. The growth of cryptocurrency as a payment method has made it a target for scams.
Cryptocurrency Fraud Insights
In a related development, the FBI reported that cryptocurrency-related complaints made up 10% of all financial fraud complaints last year but accounted for half of the total losses. This statistic highlights the role of crypto in investment scams, often leaving victims in "massive debt" as they attempt to recover their losses.
Overall, financial fraud involving the use of cryptocurrency surged by 45% in 2023, reaching $5.6 billion in total losses. The FBI’s Internet Crime Complaint Center received 69,468 crypto-related complaints. As Michael D. Nordwall from the FBI notes, the "decentralized nature of cryptocurrency", the quick and irreversible transactions, and the ability to transfer value globally make it an attractive tool for criminals, raising significant obstacles in recovering stolen funds.
