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  • Regulatory Clampdown on Bitcoin ATMs Expected

    Bitcoin ATM used for Money Laundering

    With more than 8000 worldwide, Bitcoin ATMs are rapidly growing throughout the world and are spotted around most cities in the western world at least.

    Buying Bitcoin from an ATM is one of the best ways to buy Bitcoin anonymously, albeit a slightly more expensive way than the KYC regulated exchanges.

    And according to a report by CipherTrace, it appears that the Bitcoin ATMs (BATM) are being used by people wanting to launder money.

    Bitcoin ATMs Being Used For Money Laundering?

    ‘CipherTrace research revealed US Bitcoin ATM users sent more funds to high-risk exchanges, which are more likely to be used for money laundering, than low-risk exchanges in 2019,’ says the report.

    ‘The percentage of funds sent to high-risk exchanges from U.S. BATMs has seen exponential growth, doubling every year since 2017.’

    Money Laundering

    This is a rise from 2% in 2017 to over 8% today, and the speed at which Bitcoin ATMs are sprouting up will likely give the government an excuse to clamp down.

    Currently, there are about 6000 BATMs in the US alone, and about 8,300 worldwide, which is up from 5000 in 2019, a rise of more than 60%, and the installation rate has doubled since the start of the year.

    Another stat from the report, likely to trigger a government clampdown: with all the money being garnered through the Bitcoin ATMs, about 88% of it is kept in offshore accounts.

    It’s a huge increase in just three years, and although more government meddling is expected the Bitcoin operators are complying.

    Bitcoin ATM Operators Are Doing All They Can To Combat Money Laundering

    It has to be said that there’s no actual proof of money laundering, but the circumstantial evidence suggests they are taking this route.

    Despite the alleged hike in money laundering, Bitcoin ATM operators claim they are complying with government regulations regarding the KYC and FINCEN laws.

    BITCOIN ATM stricter regulations

    The CEO of Coinsourse, Sheffield Clark was questioned on the money laundering problems faced by Bitcoin ATM providers, and he said, ‘compliance was key’ to the way Coinsource operated.

    ‘We obviously invested heavily in building our AML and KYC program,’ said Clark. ‘And then staffing it correctly with experts that could support us in the venture.’

    Coinsource operate over 500 Bitcoin ATMs and they are certainly taking their regulatory compliance seriously, as are most ATM operators worldwide.

    For example, all Bitcoin ATM operators have to register as money services businesses and must keep track of all transactions going through their machines.

    Only last month Canada imposed stricter regulations concerning firms dealing with virtual currencies as Money Service Businesses (MSBs) only last month.

    And in the EU, the German Financial Market Authority (BaFin) introduced new anti-money laundering regulations targeting Germany’s existing cryptocurrency regulatory loopholes, specifically targeting unlicensed Bitcoin ATMs across the country.

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    Stricter Bitcoin ATM Regulations Are Coming

    With the crackdown from these jurisdictions, it seems the US will likely follow suit, and introduce stricter laws for Bitcoin ATM operators.

    But what more can they do? They comply with all the laws, they’re registered, they keep track of all the transactions on their machines.

    Nobody wants to see Bitcoin being used for money laundering, but the fact is fiat currency outpaces Bitcoin at something ridiculous like 800:1 for money laundering.

    Maybe if the banks owned the ATMs and used them themselves for money laundering, it wouldn’t be such an immediate concern for the governments.

    Author: Pablo Clarke


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