The watchdog of the United Kingdom, the Financial Conduct Authority has announced that all bitcoin ATMs backed by exchanges in the country are required to register with the agency or risk being shut down. The regulator, in the statement, said that this has become necessary in a bid to protect the investors in the country.
Machines Going Off Radar
According to data from BitcoinATMRadar, more than 10 bitcoin ATMs have shut down in the past 24 hours. The coin ATM monitoring site shows that the number of Bitcoin ATMs active on Saturday, March 12 were 70, down from 80 that operated on Friday.
The agency, citing the need to protect investors, stated that cryptocurrencies pose unmitigated risks to users because they are not regulated assets. The agency also said that those putting their funds in cryptocurrencies should be prepared to lose them if something goes wrong.
Tough Licensing Requirements
There are many unregistered Bitcoin ATMs in the UK, not due to a lack of will to comply with guidelines of the FCA, but due to the fact that unfavorable policies have resulted in few approvals from the regulator.
Since most of the applications for the operation of bitcoin ATMs were declined, the operators have mostly operated unregistered dispensing machines for cryptocurrencies. However, with the new move by the FCA to curtail unlicensed ATMs, operators who have avoided the radar will have no option but to shut down to avoid punitive actions from the regulator.
High Demand for Bitcoin ATMs
The increase in the number of bitcoin ATMs is market-driven. This is the consequence of the growing demand for quick cash or bitcoins from users. The machines are convenient since the user wouldn’t search for long before gaining access to a machine. In the EU and UK, getting an operational license for cryptocurrency ATMs doesn’t come cheap. The legal framework around operation is also harsh. This could be another reason why more bitcoin ATMs may be shutting down soon.
The new stance of the FCA may have taken operators by surprise. A certain level of legal acceptance seemed to exist in the coin exchange and dispensing operations in the UK. There is a possibility that this is another strategy to plug financial valves that exist in the monetary system, which may give the Russians a channel through which to evade the sanctions of the EU and the US.