Crypto ATM Money Laundering: UK Operator Pleads Guilty to FCA Charges
Olumide Osunkoya, in a landmark case, is the first UK individual to plead guilty to operating crypto ATM against the law.
The 45-year-old Londoner pleaded guilty in Westminster Magistrates’ Court to running crypto-ATMs when not registered to do so, fabricating a document, and possessing criminal property.
FCA Warns: Crypto ATMs “Handing Money to Criminals”
Recently, the UK’s FCA imposed charges on Olumide Osunkoya for running at least 11 unregistered crypto-ATMs, through which £2.6 million of transactions were made from December 2021 to September 2023. After his registration application to the FCA was denied in 2021, Osunkoya expanded his network of crypto-ATMs situated in retailing convenience stores across the UK.
He did not conduct basic customer due diligence and source of funds checks that may have stopped money laundering and tax evasion.
According to Therese Chambers, joint executive director of enforcement and market oversight at the FCA, the message is clear – those illegally operating these machines will be stopped, and anyone using it is directly handing their money to criminals.
A few weeks ago, the FCA said it charged a 45-year-old for operating an illegal cryptocurrency business; that is how the case of Osunkoya came into view. The court disclosed he most probably made very huge gains as the margins on transactions fell between 10% and 60%. He allegedly created a fictitious identity and also lied that he had sold the ATM network to a non-existing individual to evade the FCA regulations.
Possible Sentence – 25 Years in Prison
The case represents the first-ever criminal prosecution by the FCA against unregistered crypto asset activity under the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2017, and the first charges for operating such machines estate in the UK.
Osunkoya could serve up to 2 years in prison for operating unregistered ATMs, face up to 10 years in prison for forgery, and up to 14 years in prison for criminal property possession. He will be sentenced at Southwark Crown Court on a date to be confirmed.
The conviction comes at the time when regulators around the world are struggling to cope with the rapidly changing landscape around cryptocurrencies. At present, there are no legal crypto ATM operators in the UK because every such machine must be registered with the FCA to operate lawfully.
FCA has continuously been working on the pretext of these devices being illegally installed in the UK, working in collaboration with law enforcement agencies. Their efforts in 2023 investigated 34 suspected locations after which they removed 26 unlawfully operating machines.
$110 Million Lost to Scams This Year
While the UK’s FCA has been to put illegal crypto ATMs to a halt, such machines remain incredibly famous in many other countries. For example, the United States has upwards of 31,000 installed devices that present users with ease regarding the purchase and sale of cryptocurrencies.
While the associated risks of money laundering and other not-so-likable actions do raise some concerns, many developed nations have introduced regulations to keep such risks at bay.
Cryptocurrency ATMs have also become a favorite tool for fraudsters. This is evidenced by data from the United States Federal Trade Commission.
According to it, users lost $110 million this year due to crypto ATM scams. Emma Fletcher, a senior data researcher at the FTC, reacted to the rise and explained that scammers are using these machines to defraud people more than ever compared to past years.
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