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
TheFinancial 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 commentappeared a 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 crypto-asset 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 ATMs. 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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