Olumide Osunkoya has become the first person in the UK to plead guilty to operating an illegal crypto ATM in a landmark case. Olumide, 45, pleaded guilty at Westminster Magistrates’ Court to operating unregistered crypto ATMs, forging documents and possessing criminal assets.
FCA Warning: Funding Criminals
The UK’s Financial Conduct Authority (FCA) laid charges against Osunkoya for operating at least 11 unregistered crypto ATMs and processing transactions worth £2.6 million through these machines. Osunkoya, whose application to register with the FCA was rejected in 2021, has expanded its network and installed crypto ATMs in retail stores across the country. By failing to conduct basic customer due diligence and source of funds checks, Osunkoya’s activities increased the risk of money laundering and tax evasion. Therese Chambers, FCA’s Executive Director of Enforcement and Market Supervision, said;
“Those operating these illegal machines will be stopped. “Those who use them provide money directly to criminals.”
Criminal Sanctions and Possible Penalties
This case represents the FCA’s first criminal prosecution against unregistered cryptoasset activity under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. Osunkoya faces up to 2 years in prison for operating an unregistered ATM, up to 10 years in prison for forging documents, and up to 14 years in prison for possessing criminal assets.
There are currently no other crypto ATM operators legally operating in the UK. This is because each machine must be registered with the FCA in order to operate legally. FCA continues to work collaboratively with law enforcement to block these illegally installed devices. FCA investigated 34 suspicious locations in 2023 and removed 26 illegally operating machines.
Fraud and Loss of Money
While the UK regulator the FCA is trying to crack down on illegal crypto ATMs, such machines remain hugely popular in many other countries. For example, there are more than 31,000 devices in the United States, making it easy for users to buy and sell cryptocurrencies. However, due to the risk of money laundering and other criminal activities, many developed countries have introduced regulations to prevent such risks.
According to data from the United States Federal Trade Commission, users lost $110 million due to crypto ATM scams this year. Emma Fletcher, FTC’s senior data investigator, noted that scammers are using these machines to defraud people more than in previous years.
Osunkoya’s case is considered as an indicator of how serious consequences the lack of regulation and illegal activities in the cryptocurrency field can have. The increase in such cases is an important warning for both users and operators to comply with the regulations.
The FCA’s continued fight against such operations is critical for the cryptocurrency market to become more transparent and secure. Users need to be aware of the risks of buying and selling cryptocurrencies through illegal channels.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
