Bitcoin cashpoints forced to shut down after being declared illegal

The FCA has held a strict line on cryptocurrencies, requiring British firms that let people buy or sell Bitcoin and other digital assets to pass checks to be part of a register of firms.

Just 33 firms sit on the cryptoasset register and 22 on a temporary list, which allows them to trade until the end of this month. In comparison, the FCA says 110 firms that it had named as continuing to operate without being registered have since shut down.

The regulator said: “We regularly warn consumers that cryptoassets are unregulated and high-risk which means people are very unlikely to have any protection if things go wrong, so people should be prepared to lose all their money if they choose to invest in them.”

One Bitcoin ATM operator, Gidiplus, recently lost a judicial review attempting to overturn the FCA’s decision to refuse it a licence. 

The regulator had told the company that its weaker identity checks on users depositing less than £250 meant there was a risk of “smurfing”, in which large numbers of “mules” deposit small amounts to evade detection.

Olumide Osunkoya, Gidiplus’s owner, said his machines were no longer operational. He said he had sold them to a buyer in eastern Europe, where checks are less strict, and that other operators in the UK are doing the same. 

Another owner, Gadcet, said it was no longer trading.

The chief executive of Blockchain.com, Britain’s biggest cryptocurrency company, recently criticised the FCA, saying the regulator’s stance meant the UK was falling behind Europe on cryptocurrency innovation.