UK hands first-ever prison sentence for illegal crypto ATMs in regulatory crackdown

The UK has sentenced Olumide Osunkoya to four years in prison for operating a network of illegal cryptocurrency ATMs without regulatory approval.

The conviction marks the first criminal case involving unregistered crypto activity in the UK and signals a broader crackdown by the Financial Conduct Authority (FCA) on unauthorised digital asset operations.

Osunkoya’s company, GidiPlus Ltd, ran 28 unlicensed crypto ATMs, processing £2.6 million ($3.14 million) between December 2021 and March 2022.

Authorities revealed that he later attempted to evade detection by transferring the machines under a false identity.

His sentencing follows an FCA-led effort to remove illegal crypto ATMs across the country, underscoring the regulator’s determination to tighten compliance in the digital asset sector.

Crypto ATMs and financial crime

Crypto ATMs allow users to buy and sell digital assets using cash, offering a level of anonymity that regulators argue makes them vulnerable to misuse.

While the UK has imposed strict anti-money laundering (AML) requirements on crypto firms, unregistered ATMs present a significant enforcement challenge.

Osunkoya not only failed to register with the FCA but also neglected to implement AML checks, allowing illicit transactions to go unchecked.

Authorities found that he forged identity documents and operated under false company names, highlighting concerns that unregulated crypto ATMs could be used for financial crime.

The FCA, which requires all crypto firms to meet its AML standards, has long warned against the risks associated with digital assets.

The case has reignited debates on the necessity of stricter enforcement mechanisms, as regulators seek to prevent financial crime without stifling innovation in the crypto sector.

FCA crackdown on illegal crypto ATMs

Osunkoya’s conviction follows a broader effort by the FCA to dismantle illegal crypto ATMs.

In 2023, the regulator, in collaboration with local law enforcement, inspected 38 locations suspected of hosting unregistered machines, leading to the removal of 30 devices.

The crackdown resulted in a sharp decline in the number of UK-listed crypto ATMs on Coin ATM Radar, dropping from 80 in 2022 to none in 2024.

The FCA has consistently maintained that crypto assets remain highly speculative and largely unregulated in the UK.

While legal ATMs must comply with stringent rules, the lack of registered machines suggests that operators are struggling to meet the requirements.

The regulator has also reiterated that consumers engaging with crypto investments should be prepared to lose all their money.

The UK’s approach to illegal crypto ATMs is part of a growing global trend. In the US, regulators have increased scrutiny on crypto kiosks due to concerns over money laundering and fraud, with some states requiring enhanced reporting and licensing.

The European Union has also introduced measures under its Markets in Crypto-Assets (MiCA) regulation to standardise compliance across member states.

The FCA’s aggressive stance suggests that the UK may follow similar models, potentially reintroducing legal crypto ATMs under stricter guidelines.

The post UK hands first-ever prison sentence for illegal crypto ATMs in regulatory crackdown appeared first on Invezz