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The UK’s financial regulator has charged a man with unlawfully running a network of crypto ATMs, its first criminal prosecution for an activity that is widely used for money laundering.
The Financial Conduct Authority said on Tuesday that it had charged Olumide Osunkoya, a 45-year-old living in London, with running multiple crypto ATMs that had allegedly not been registered with the watchdog.
Crypto ATMs are machines that allow users to exchange standard money for cryptocurrency, working in a similar way to a typical bank ATM.
Authorities around the world have sought to shut the machines down because they are deemed an ideal way to launder money, with little traceability on where funds come from and to where they are sent. Operators typically earn fees on transactions.
The machines run by Osunkoya processed £2.6mn worth of crypto transactions across multiple locations between December 2021 and September 2023, the FCA said.
Therese Chambers, FCA joint executive director of enforcement and market oversight, said using a crypto ATM meant “handing your money directly to criminals”. The watchdog’s move showed that “if you’re illegally operating a crypto ATM, we will stop you”, she added.
No legal crypto ATM operators exist in the UK, the FCA said, adding that its prosecution of Osunkoya marked the first such criminal case it has brought under money laundering regulations.
The price of bitcoin hit a record high of $73,000 in March this year but has since fallen to trade at about $57,000.
Nevertheless, the number of crypto ATMs continues to grow. According to data provider AltIndex, more than 37,500 existed worldwide as of May this year as users seek to access crypto by bypassing the traditional, regulated banking system.
Crypto companies operating in the UK must register with the FCA, which assesses them under anti-money laundering rules and other regulations.
In its latest annual report published this month, the FCA said it had rejected 87 per cent of the applications it received from crypto asset companies seeking clearance for their money laundering defences.
It also issued 450 consumer alerts against crypto asset promoters only three months after tightening rules against misleading marketing.
The FCA said Osunkoya had been the director of Gidiplus Ltd before acting independently. Gidiplus Ltd’s registration application had been rejected by the regulator in 2021.
The watchdog said Osunkoya was being charged with two offences under money laundering and terrorist financing regulations, two offences related to fake documents “created and used” for his activities, and one offence of possession of criminal property “relating to the suspected proceeds of his crypto ATM business”.
Osunkoya will appear at Westminster Magistrates’ Court at the end of the month. He did not immediately respond to a request for comment via LinkedIn.
https://www.ft.com/content/71e4e115-03bd-44a6-89b8-a573568b31c1
