People using unregistered crypto ATMs risk losing their money, FCA warns

The regulator said it often sees no effective channels of communication for people to get in touch with the operators of machines.

Crypto ATMs are physical machines that allow people to buy and sell different cryptoassets with cards or cash (Dominic Lipinski/PA) (PA Archive)

People using unregistered cryptocurrency machines risk losing their funds if something goes wrong, the City regulator has warned.

The Financial Conduct Authority (FCA) said it is continuing to crack down on unregistered crypto ATMs in the UK.

The regulator has been visiting and inspecting locations across the UK suspected of hosting such machines.

Visits have been part of a co-ordinated operation with other law enforcement agencies, the FCA said.

Crypto ATMs are physical machines that allow people to buy and sell different cryptoassets with cards or cash.

Unlike traditional ATMs, they are not connected to a bank account. Instead, the machines send or receive cryptoassets from a person’s crypto wallet.

The machines may be identifiable by signage that displays various cryptoasset logos.

They are generally found in retail premises and the FCA has seen, and disrupted, machines based in convenience shops, shopping centres, pubs, bars, restaurants, takeaways, hairdressers, and barbers.

If you use a crypto ATM in the UK, you are using a machine that is operating illegally and you may be handing your money over to criminals

Steve Smart, Financial Conduct Authority

Steve Smart, joint executive director of enforcement and market oversight at the FCA, said: ”If you use a crypto ATM in the UK, you are using a machine that is operating illegally and you may be handing your money over to criminals.

“You will not be protected if something goes wrong, and you could lose your money.

“It is also unlikely you will be able to contact the operator of the machine to resolve any problems you may have. Often, we see no effective channels of communications for people to get in touch with the operator.

“We will continue to warn the public and take appropriate enforcement action against unregistered crypto ATM operators.”

The FCA regularly warns consumers that cryptoassets are unregulated and high-risk, which means people are very unlikely to have any protection if something goes wrong.

Cryptoasset exchange providers in the UK must be registered with the FCA and comply with UK money laundering regulations.

In one case highlighted by the FCA, someone contacted Citizens Advice after paying £1,000 into a crypto ATM. After trying to buy crypto with the machine, the machine stated that the transaction was not successful, but no funds were returned.

The person was unable to make contact with the operator of the machine and get their funds returned.

Following an inspection by the FCA, that crypto ATM is no longer in operation.