Cash is a problem during a pandemic. Cash-intensive businesses like nail bars cannot trade, and takeaway food outlets have turned into delivery hubs with payment in advance by card. Luckily, anyone desperate to offload their criminal cash has a new-ish option that has been steadily gaining ground. The cryptocurrency ATM is a freestanding machine that is appearing in the corner of shops, petrol stations and (I’m reliably informed by the Daily Telegraph newspaper) strip clubs, and it will happily swap your cash for cryptocurrencies and vice versa.
The CATM (no-one else calls them that – it’s my own invention and you’re welcome) was something of a novelty when a Robocoin machine opened in the Waves coffee shop in Vancouver in Canada in October 2013. Europe got its first one two months later, in Bratislava in Slovakia. CATMs come in two flavours: uni-directional ones allow you to buy cryptocurrency using cash or a debit card, while bi-directional ones allow you sell cryptocurrency as well. Now you know what a dinosaur I am when it comes to matters cryptocurrency, so you will forgive me for quoting from the admirably clear description in Wikipedia: “[CATMs] look like traditional ATMs, but do not connect to a bank account and instead connect the user directly to a [cryptocurrency] wallet or exchange. While some [CATMs] are traditional ATMs with revamped software, they do not require a bank account or debit card. On average, transaction fees are 10-20% but can go as high as 25% and as low as 7%.”
As eny fule no, Bitcoin is having a moment – its value is surging. And it’s dragging the CATM trend with it. According to Coin ATM Radar, in February 2020 there were 6,759 CATMs in the world – and today there are 17,868. Speaking to the Daily Telegraph, Ben Phillips of RockItCoin said that his company now has 900 CATMs installed in the US: “It just appears that more people are using Bitcoin for the first time and obviously more people are continuing to come back and use the machines. We do add that element of privacy where users can feel secure, like they’re dealing just with us. They’re not putting any bank information in.”
Whoa there, missy – did you say “adding an element of privacy”? So people can feed stacks of cash into the CATM and get cryptocurrency added to their e-wallet, all without any pesky financial information being checked? With the recent publicity about the dangers of – and to – money mules, this is surely a risk area that must be addressed. Thankfully the regulator has CATMs in its sights: in a speech on 24 March 2021, Mark Steward, (Executive Director of Enforcement and Market Oversight at the FCA) announced that “we have now developed a version of the Warning List, called the Unregistered Cryptocurrency Businesses List, to help consumers and FCA authorised firms identify cryptocurrency firms that appear to be carrying on business in the UK but are not registered with the FCA or sought such registration – we placed the first names on the Unregistered Cryptocurrency Businesses List earlier this month, all crypto ATM firms”. Sadly, CATMs are also on the criminal radar: at the end of last month, a man in Sydney was jailed for laundering money through CATMs – in this case, money was stolen from people’s cryptocurrency wallets and he then withdrew it in cash via CATMs. So when lockdown lifts and you return once more to The Saucy Minx Exotic Dancing and Dining Club for Discerning Gentlemen and spot a new CATM in the corner, the strippers might not be the only ones losing their shirts.
Thanks to David Winch for pointing out this issue to me – I do love an AML issue