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UK: ATMs for cryptocurrencies must close

For many state financial bodies, cryptocurrencies are a red rag. The reason for this is not only that they are almost unpredictable. On top of that, they are an ideal tool for criminals to launder dirty money. Now the financial regulator in the UK is reacting to the recently opened ATMs for cryptocurrencies. These are being closed again due to a lack of permits.

Crypto ATMs are illegal

The reason for the closure of the modern ATMs is the lack of approvals from the Financial Conduct Authority (FCA). Accordingly, the UK’s financial markets regulator has now made it clear that the operation of the machines must cease as soon as possible. Should the operators act contrary, this could have serious legal consequences. After all, this is a violation of the Money Laundering Act. The tax authorities are thus adding further pressure to their demand. On closer inspection, the actions of the ATM operators are also highly dubious. And it does not matter whether it is cryptocurrencies or real money that can be withdrawn or deposited at the machines.

Rather, the companies in question have been operating their machines without even a single one of the devices being approved in advance. The authority is basing its actions on an important ruling made recently by the High Court, Britain’s highest court. “Gidiplus,” a cryptocurrency trader, asked the court to allow them to resume their previously banned cryptocurrency banking operations. However, they did not receive the relevant permission from the judges. In their ruling, the judges emphasized that Gidiplus’s operations were simply too opaque. This is not enough to be able to truly rule out money laundering.

The dark side of cryptocurrencies

A few years ago, cryptocurrencies still led a shadowy existence. Yet they were celebrated not only by IT fans as a fair alternative to conventional state currencies. Criminals quickly realized that digital money could be used as a means of payment for illegal transactions. For years, transactions with Bitcoin, Ethereum and the like took place in a part of the Internet that was largely invisible to the authorities – the darknet. In the meantime, however, the currencies produced with the help of powerful graphics cards have also arrived in society at large. In this context, consumers are regularly made aware by financial supervisory authorities of the uncertainties associated with these digital funds.

This is what the UK Financial Services Authority did as well. It describes trading with cryptocurrencies as high-risk. It emphasizes that the lack of regulations in particular means that ups and downs can be the order of the day. Last year, Elon Musk, CEO of SpaceX and Tesla, among others, vividly demonstrated how rapidly prices can rise or fall. He announced on Twitter that Tesla’s vehicles could soon be paid for with cryptocurrencies. Promptly, the values of Bitcoin and Co. shot up. After the reigning richest person in the world then rowed back again and revised the payment method, the prices experienced a downright slide.

Total loss can be the consequence

The consequences for buyers of cryptocurrencies can sometimes be severe. This has also been made clear by the UK Financial Services Authority. In an emergency, namely, a loss of the entire money invested can threaten. After all, there are simply no common protection mechanisms that classical credit institutions offer when trading with conventional state currencies. An investment should therefore be considered carefully. Incidentally, the official action of the British financial supervisory authority is not an isolated case. Important court hearings on the future of crypto traders are also pending in the USA. One large and well-known provider in this regard is “Bitconnec”. The founder of the platform is currently being sought by the US judiciary. After all, he is accused of a fraud in the billions.

The bank robbers of the future

But not only the operators of the corresponding platforms can be in the focus of the courts. The US judiciary has also had to deal with modern bank robbers. In the age of Bitcoin, they no longer have to crack open safes in order to scam a lot of bulging wallets. Nowadays, a good knowledge of IT and an extra dose of criminal energy are enough. A married couple from New York proved this in 2016. Both hacked the servers of Bitfenix without further ado and scammed the proud sum of 120,000 Bitcoin (approx. 3.6 billion US dollars) in the process. However, when they tried to turn the “soiled” Bitcoin into clean ones, their burglary was discovered. Had this not been the case, the owners of the Bitcoin would now be facing a total loss. Given the increase in value that the cryptocurrency has made in the last almost six years, this would certainly be a big nightmare for some. This way, on the other hand, they can enjoy rich profits.

Insecurity of crypto ATMs

Even though cryptocurrency ATMs have a lot in common with traditional ATMs, they share the usual risks with crypto platforms on the web. However, ATMs would also have to be consistent with banning trading on the web. After all, transactions over the Internet are far more common and by no means less risky. Nevertheless, the British financial regulator does not seem to deviate from its assessment and is urging crypto companies to close the ATMs. To avoid expensive proceedings, the providers will certainly comply with the order. By the way, there are crypto ATMs in Germany as well. There are now 51 of these modern machines in this country.

Simon Lüthje

I am co-founder of this blog and am very interested in everything that has to do with technology, but I also like to play games. I was born in Hamburg, but now I live in Bad Segeberg.

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For many state financial bodies, cryptocurrencies are a red rag. The reason for this is not only that they are almost unpredictable. On top of that, they are an ideal tool for criminals to launder dirty money. Now the financial regulator in the UK is reacting to the recently opened ATMs for cryptocurrencies. These are … (Weiterlesen...)

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