In the UK, Olumide Osunkoya has been handed a four-year prison sentence for managing a network of illicit cryptocurrency ATMs without the necessary regulatory approval.
This marks the UK’s inaugural criminal case against unregistered crypto operations, heralding a wider clampdown by the Financial Conduct Authority (FCA) on unlicensed digital asset activities.
Osunkoya’s firm, GidiPlus Ltd, operated 28 unauthorized crypto ATMs, handling transactions worth £2.6 million between December 2021 and March 2022. It was later discovered that he attempted to evade legal scrutiny by transferring the machines under an assumed identity.
This sentencing is part of a vigorous FCA campaign to eliminate illegal crypto ATMs nationwide, demonstrating the regulator’s commitment to enforcing compliance within the digital asset realm.
Crypto ATMs, which enable the exchange of digital assets for cash, provide a degree of anonymity that, according to regulators, makes them susceptible to misuse.
Despite the UK‘s stringent anti-money laundering (AML) regulations for crypto businesses, unregistered ATMs pose a considerable challenge.
Osunkoya not only neglected to register his operation with the FCA but also failed to implement essential AML measures, thus permitting unchecked illicit transactions.
Further investigations revealed his use of forged identity documents and fictitious company names, fuelling concerns over the potential for financial crimes facilitated through unregulated crypto ATMs.
The FCA, which mandates all crypto enterprises to adhere to its AML guidelines, has frequently highlighted the risks associated with digital assets.
This case has reignited discussions on the need for more robust enforcement mechanisms to combat financial crime without curbing innovation in the cryptocurrency sector.
In a concerted effort throughout 2023, the FCA and local police inspected 38 sites suspected of harboring unauthorized ATMs, resulting in the removal of 30 machines.
This operation significantly reduced the presence of crypto ATMs in the UK, with listings on Coin ATM Radar plummeting from 80 in 2022 to none by 2024.
The regulator continues to warn that cryptocurrency remains largely speculative and unregulated, advising consumers to be prepared for the possibility of losing all invested funds.
The UK’s proactive stance is part of a broader global movement, with heightened regulatory scrutiny in the US and new compliance standards set by the European Union under its Markets in Crypto-Assets (MiCA) regulations.
The FCA’s assertive actions indicate that the UK may consider reintroducing legal crypto ATMs under more stringent conditions, aligning with international regulatory trends.
