London Man Habibur Rahman Becomes First in the UK to Face Prosecution for Running Unauthorized Bitcoin ATMs

The FCA has issued a warning about the risks linked with unregistered cryptocurrency ATMs, underlining consumers' vulnerability in a poorly regulated industry.

A London man has become the first person in the UK to be prosecuted for running unauthorized Bitcoin ATMs, following a raid by Kent Police and the Financial Conduct Authority (FCA).

Habibur Rahman, 37, of East Ham, was detained on April 28, 2023 after a search of an electronics store in Chatham uncovered several bitcoin ATMs, one of which was in plain sight of the public.

Rahman is accused of operating these automated cash machines without registering them with financial authorities, an offense that carries a hefty fine or even imprisonment.

In addition to these charges, Rahman is also accused of laundering £300,000 by transferring criminal funds into cryptocurrency, a practice that has raised red flags among law enforcement agencies worldwide.

This case, which will be heard in Medway Magistrates’ Court on October 10, 2024, highlights a major regulatory challenge in the digital asset arena.

The FCA has issued a stark warning about the risks associated with using unregistered cryptocurrency ATMs, highlighting consumers’ vulnerability in a largely unregulated industry.

Emphasizing the need for regulatory oversight and cooperation among law enforcement agencies in protecting the financial industry and consumers, Matthew Long, FCA’s Director of Payments and Digital Assets, said:

“We strongly advise consumers against using unregistered crypto ATMs. If you do choose to use one, be aware that you are not covered by the Financial Ombudsman Service or the Financial Services Compensation Scheme if things go wrong.”

The FCA’s investigation forms part of a wider campaign to crack down on illicit activity linked to crypto ATMs, which have been used to handle significant volumes of criminal transactions worldwide.

According to TRM Labs, over $160 million in criminal transactions have been processed by crypto ATMs since 2019.

While cryptocurrency ATMs are flourishing in other countries despite facing strict bans in the UK, Australia has seen a 1700% increase in crypto ATMs in the last two years, and New Zealand has also rapidly expanded its installations.

On the other hand, Germany recently seized approximately $279,000 from illegal crypto ATMs in a broader trend of increasing regulatory scrutiny and action.

The FCA’s warning also emphasizes the lack of regulation and protection in the crypto industry, stating that “crypto assets are high-risk and largely unregulated in the UK, which means that consumers using crypto assets will not have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme if things go wrong.”

With over 36,000 crypto ATMs installed worldwide, the FCA’s action highlights the urgent need for regulatory oversight in the rapidly evolving digital currency sector.

This investigation is part of the FCA’s larger attempt to crack down on illegal crypto ATMs across the UK, which saw 26 machines shut down in a coordinated operation earlier this year.

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