The Financial Conduct Authority has charged an individual with unlawfully running multiple crypto ATMs without FCA registration. Crypto ATMs are machines that allow customers to buy or convert funds into cryptoassets. Firms operating crypto ATMs must be registered with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (“MLR”). The FCA emphasises that there are currently no legal crypto ATM operators in the UK.

The individual first acted as a director of a company, Gidiplus Ltd, and later as a sole practitioner. He is being charged with two offences under Regulations 86 and 92 of the MLR for operating crypto ATMs without FCA registration. He is also charged with two offences under the Forgery and Counterfeiting Act 1981 relating to false documents created and used while operating the ATMs and an offence of possession of criminal property under the Proceeds of Crime Act 2002 relating to the suspected proceeds of his crypto ATM business. 

Gidiplus Ltd had previously applied to be registered as a cryptoasset exchange provider under the MLR, its registration application was refused in November 2021, following which it should have immediately ceased operating crypto ATMs and was specifically on notice of that by 30 December 2021.  Not only did the FCA consider that Gidiplus Ltd had inadequate anti-money laundering systems and controls including in relation to business-wide and customer risk assessments, customer due diligence, enhanced due diligence and transaction monitoring, but that the individual lacked probity as he had misled three banks as to the nature of Gidiplus’s business.

The charges mark the FCA's first criminal prosecution relating to unregistered cryptoasset activity under the MLR as well as being the first charges brought against a person accused of running a network of crypto ATMs in the UK. Regulation 92 of the MLR states that where a body corporate, like GidiPlus Ltd, commits such an offence, an officer of that body corporate, such as a director of that body, is also guilty of the underlying offence where it was either committed with the consent or connivance of the officer, or is otherwise attributable to any neglect on the part of the officer.

The charges follow the FCA’s recent operation, working in partnership with law enforcement agencies, to tackle illegally operated crypto ATMs across the country. The defendant will appear before Westminster Magistrates’ Court on 30 September 2024.

Last month, Kent police also charged an individual with running an illegal ATM without FCA authorisation.