Watchdog cracks down on crypto ATM operators around Leeds

Several sites around Leeds suspected of hosting illegally operated crypto cash machines have been inspected by the Financial Conduct Authority.

The action, with West Yorkshire Police, is said to be a national first.

Users buy or sell crypto assets such as Bitcoin by putting cash into or taking it out of dedicated terminals that can resemble regular cash machines.

But no such machines are registered with the FCA, it says, so operating them in the UK is illegal.

One similar service is FCA registered - but its users buy crypto assets via an app or bank transfer and then withdraw the proceeds of sales via conventional cash machines.

The watchdog says it is working with multiple law-enforcement partners, including local police forces, to disrupt and disable illegal crypto cash machines in shopping malls, pubs, restaurants, newsagents and post offices.

"Money mules" were increasingly using the machines - more vulnerable than online exchanges - to launder illegally obtained cash, a 2020 government report found.

Det Sgt Lindsey Brants, of West Yorkshire Police Force Cyber Team, said: "Having conducted intelligence-gathering work across West Yorkshire, we soon established the locations of several live crypto ATMs."

Officers had issued letters warning the operators to stop using the machines and that any breach of money-laundering regulations would result in an investigation, she said, and then shared their findings with the Financial Conduct Authority.

The FCA had issued a similar warning in March 2022.

"We are pleased to be able to work in partnership with the FCA in what we believe is a national first here in West Yorkshire," Det Sgt Brants added.

Unregistered crypto-asset activity falling under the money-laundering regulations carries a maximum sentence of two years in prison.

The FCA's Mark Steward said it would continue to identify and disrupt unregistered crypto businesses.

Cryptocurrency products were "unregulated and high risk", he warned, and investors should be prepared to lose all their money.