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In a
landmark case, Olumide Osunkoya has pleaded guilty to operating an illegal
network of cryptocurrency ATMs across the United Kingdom, marking the first
conviction of its kind in the country. The 45-year-old London resident admitted
to five offenses at Westminster Magistrates’ Court today (Monday), including
running unregistered crypto ATMs, creating false documents, and possessing
criminal property.
Crypto ATM: First UK
Conviction Shakes Industry
The
Financial Conduct Authority (FCA), the UK’s financial watchdog, brought charges
against Osunkoya for operating at least 11 crypto ATMs without proper
registration. These machines processed over £2.6 million ($3.2 million) in
transactions between December 2021 and September 2023.
According
to court evidence, Osunkoya continued to expand his network of crypto ATMs in
local convenience shops across the UK, despite being denied FCA registration in
2021. The machines were operated without conducting any customer due diligence
or source of funds checks, potentially facilitating money laundering and tax
evasion.
“Our
message today is clear. If you’re illegally operating a crypto ATM, we will
stop you,” commented Therese Chambers, joint executive director of enforcement
and market oversight at the FCA. “If you’re using a crypto ATM, you are handing
your money directly to criminals.”
Her comment
appeared
few weeks ago when the FCA first reported that it had charged a 45-year-old
with operating an illegal cryptocurrency business.
The court
heard that Osunkoya likely profited substantially from the illegal operation,
with transaction margins ranging from 10% to 60%. In an attempt to evade FCA
rules, he allegedly created a false alias and falsely claimed to have sold the
ATM network to a non-existent individual.
Olumide Osunkoya pleads guilty to illegally operating #crypto ATM network: https://t.co/nEv64SbeeW
— Esther Martin (@Fin_Compliance) September 30, 2024
This case
represents the FCA’s first criminal prosecution related to unregistered
cryptoasset activity under the Money Laundering, Terrorist Financing and
Transfer of Funds Regulations 2017. It also marks the first time charges have
been brought against an individual for operating a network of crypto ATMs in
the UK.
Osunkoya
faces potential sentences of up to 2 years in prison for operating unregistered
crypto ATMs, up to 10 years for forgery offenses, and up to 14 years for
possession of criminal property. Sentencing will take place at Southwark Crown
Court on a date to be confirmed.
FCA Shut Down 26 Illegal
Crypto ATMs Last Year
The
conviction comes as regulators worldwide grapple with the challenges posed by
the rapidly evolving cryptocurrency landscape. In the UK, there are currently
no legal crypto ATM operators, as all must be registered with the FCA to
operate lawfully.
The market
watchdog is constantly collaborating with
law enforcement to address the issue of illegal cryptocurrency ATMs in the UK.
Their efforts in 2023 led to the inspection of 34 suspected locations and the
shutdown of
26 unlawfully operating machines.
While the
FCA works to curb illegal crypto ATMs in the UK, these devices remain popular
in other countries. The United States, for example, has over 31,000 installed
crypto ATMs1. Despite concerns about money laundering risks, many developed
nations have implemented regulations to mitigate these issues.
However,
crypto ATMs have
also become tools for scammers. In 2023, the Federal Trade Commission (FTC)
reported that users lost $110 million to ATM-related scams. Emma Fletcher, an
FTC senior data researcher, noted an increase in scammers exploiting these
machines to defraud people, stating that this method of deception has become
more prevalent than in previous years.
This article was written by Damian Chmiel at www.financemagnates.com.
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