In a remarkable case, Olumide Osunkoya is the first individual in the United Kingdom to plead guilty to operating a crypto ATM violating the law.
In Westminster Magistrates’ Court, the 45-year-old Londoner pleaded guilty to possessing illicit property, fabricating a document, and operating crypto-ATMs without registration.
FCA Issues Warning: Crypto ATM Transmit Money to Criminals
The UK’s FCA recently charged Olumide Osunkoya for operating at least 11 unregistered crypto-ATMs, facilitating the processing of £2.6 million in transactions from December 2021 to September 2023. Osunkoya expanded his network of crypto-ATMs located in retailing convenience stores throughout the United Kingdom after his registration application to the FCA was denied in 2021.
He failed to perform fundamental customer due diligence and source of funds checks that could have prevented tax evasion and money laundering.
The FCA’s joint executive director of enforcement and market oversight, Therese Chambers, has stated that the message is unmistakable: individuals illegally operating these devices will be stopped, and those who use them are directly providing their money to criminals.
A few weeks ago, the FCA announced charging a 45-year-old individual for operating an illicit cryptocurrency business. This is how Osunkoya’s case was exposed. According to the court, he probably achieved substantial profits, as the transaction margins decreased by 10% to 60%. He allegedly created a fictitious persona and falsely claimed that he had sold the ATM network to a non-existent individual to circumvent the FCA regulations.
Potential Penalty: Twenty-five years of imprisonment
The case is 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, as well as the first accusations of operating such machines estate in the UK.
Osunkoya may be sentenced to a maximum of 2 years for operating unregistered ATMs, 10 years forgery, and 14 years for criminal property possession. He will be sentenced at Southwark Crown Court on a date that has yet to be determined.
The conviction is delivered at a time when regulators worldwide are grappling with the swiftly evolving landscape of cryptocurrencies. Currently, the United Kingdom lacks any legal crypto ATM operators, as each such device must be registered with the Financial Conduct Authority (FCA) to operate legally.
In cooperation with law enforcement agencies, FCA has been diligently pursuing the pretext of unlawfully installing these devices in the United Kingdom. In 2023, they investigated 34 suspected locations and subsequently removed 26 devices that were operating unlawfully.
Crypto cams resulted in $110 million loss this year
Despite the UK’s FCA’s efforts to curtail the proliferation of illegal crypto ATMs, these machines are highly regarded in numerous other countries. For instance, the United States has over 31,000 implemented devices that facilitate purchasing and selling cryptocurrencies.
Although money laundering risks and other less desirable activities are a cause for concern, numerous developed nations have implemented regulations to mitigate these risks.
Fraudsters have also adopted cryptocurrency ATMs as their preferred instrument. Data from the United States Federal Trade Commission support this.
This year, crypto ATM schemes resulted in users losing $110 million, according to the report. Emma Fletcher, a senior data researcher at the FTC, responded to the increase by stating that scammers are employing these devices to defraud individuals at a greater rate than in previous years.
