Stay informed with free updates
Britain’s financial regulator has charged a man with unlawfully operating a network of crypto ATMs, the first criminal prosecution for an activity widely used for money laundering.
The Financial Conduct Authority said on Tuesday it has charged Olumide Osunkoya, a 45-year-old living in London, with running multiple crypto ATMs that were allegedly not registered with the watchdog.
Crypto ATMs are machines that allow users to exchange standard money for cryptocurrency, and operate in the same way as a typical bank ATM. They can withdraw cash, convert it to a cryptocurrency like bitcoin, and send the digital money to a customer’s crypto wallet address.
Authorities around the world have tried to shut down the machines because they are considered an ideal way to launder money, with little traceability about where the money comes from and where it is sent. Operators typically earn fees for transactions.
Osunkoya’s machines processed £2.6m worth of crypto transactions across multiple locations between December 2021 and September 2023, the FCA said.
Therese Chambers, the FCA’s joint executive director of enforcement and market surveillance, said using a crypto ATM meant handing your money straight to criminals. The watchdog’s action showed that “if you are illegally operating a crypto ATM, we will stop you,” she added.
Nominate a company as FT ‘Reinvention Champion’
Do you know a company that has made a smart strategy or business model change? If so, please let us know here online participation form (2 minutes to complete). We unveil the FT’s Reinvention Champions on November 13.
No legal crypto ATM operators exist in Britain, the FCA said, adding that Osunkoya’s prosecution was the first such criminal case it has brought under money laundering regulations.
The price of bitcoin hit an all-time high of $73,000 in March this year, but has since fallen to around $57,000.
Yet the number of crypto ATMs continues to grow. According to data provider AltIndex, there have been more than 37,500 worldwide as of May this year, as users try to access crypto by bypassing the traditional, regulated banking system.
Crypto companies operating in Britain must register with the FCA, which assesses them under anti-money laundering and other regulations.
In its latest annual report published this month, the FCA said it had rejected 87 percent of applications it received from crypto asset firms seeking permission for their anti-money laundering defenses.
Just three months after tightening rules against misleading marketing, it has also issued 450 consumer warnings against crypto asset promoters.
The FCA said Osunkoya was a director of Gidiplus Ltd before striking out on his own. Gidiplus Ltd’s registration application was rejected by the regulator in 2021.
The watchdog said Osunkoya was charged with two offenses under the Money Laundering and Terrorist Financing Regulations, two offenses relating to forged documents ‘created and used’ for his activities, and one offense of possession of criminal property’ with regard to the suspected proceeds of his crypto coins. ATM Business”.
Osunkoya will appear at Westminster Magistrates’ Court at the end of this month. He did not immediately respond to a request for comment via LinkedIn.