Syed Rahman considers the issues involved in the FCA’s action.
A trader who has been accused of operating an illegal cryptocurrency ATM is believed to be the first person in the UK to be charged with the offence.
Habibur Rahman, of East Ham, London, has been charged with running the machine without registration from the Financial Conduct Authority (FCA). He is due to appear at Medway Magistrates’ Court on October 10.
Mr Rahman, 37. was arrested after police officers searched the Gadcet shop in Chatham High Street, Kent, on April 28, 2023. A Kent Police spokesperson said a number of crypto ATMs were seized, including one on public display. Mr Rahman is also accused of laundering £300,000 of criminals’ cash by converting it into cryptocurrency.
The case prompted Matthew Long, FCA’s director of payments and digital assets, to emphasise that there are currently no crypto ATMs registered with the FCA. He warned that “if you’re using one of these machines, you could be handing your money to criminals.’’
It is a warning that highlights the risks of using crypto ATMs - the illegal machines where you can buy and sell cryptocurrencies.
Low-Hanging Fruit
Given there are currently no crypto ATMs registered with the FCA, this type of case can be seen as the agency going for the “low-hanging fruit’’ when it comes to prosecutions. It is reasonable to question, therefore, whether there is an adequate return on investment if the FCA focuses its efforts on pursuing such cases. Given the wider issues the FCA has to deal with in the crypto market, this case (and others like it) could be viewed as a very small drop in a very large ocean.
Law enforcement has historically lacked adequate resourcing to deal with the challenges it faces. While crypto ATMs could be an easy target for the FCA, it is debatable whether the FCA can justify putting its resources into this particular area.
As this is the first prosecution of its kind, it should serve as a sharp reminder of the obligations that are faced by those operating crypto ATMs. Given how stringent the registration regulations currently are, they certainly provide the FCA with scope for bringing enforcement action against those who fail to meet them. The onus is on those who need to register to do so. Otherwise the FCA may become more active when it comes to such enforcement – and may find it easier to justify such activity.
