First U.K. Conviction for Illegal Crypto ATM Operation

The United Kingdom‘s Financial Conduct Authority (FCA) announced its first conviction related to the illegal operation of cryptocurrency Automated Teller Machines (ATMs). The case involves Olumide Osunkoya, who pled guilty to five charges linked to running an unauthorized network of crypto ATMs. These charges were affirmed at Westminster Magistrates' Court, with sentencing set for a later date still to be determined.

According to a statement from the FCA, Osunkoya was charged for operating multiple crypto ATMs without FCA registration, involvement in creating and utilizing false documents, and possession of criminal property. The FCA emphasized that this marks its inaugural criminal prosecution concerning unregistered cryptocurrency activity, particularly focusing on a network of illicit crypto ATMs.

The FCA revealed that Osunkoya managed a network of at least 11 crypto ATMs, which facilitated transactions totaling more than £2.6 million. This operation persisted in various local convenience stores across the U.K., despite a rejection for registration by the FCA in 2021. Osunkoya’s ATMs reportedly failed to perform any know-your-customer checks, with evidence presented in court suggesting their use in money laundering and tax evasion by certain individuals.

The court further noted that Osunkoya attempted to skirt FCA regulations by concealing his identity with a false alias. The regulator indicated that Osunkoya may have profited significantly from his activities, with transaction margins reportedly ranging from 10% to 60%. Sentencing will occur at Southwark Crown Court on an unspecified future date.

This conviction is based on breaches of regulations outlined in the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs). Osunkoya faced charges according to Regulations 86 and 92, alongside accusations of falsifying documents under the Forgery and Counterfeiting Act 1981, and for possessing criminal property as outlined in the Proceeds of Crime Act 2002.

Osunkoya initially operated as a director for a company known as Gidiplus Ltd, prior to acting as a sole practitioner. Notably, Gidiplus Ltd applied for Money Laundering Regulations registration in 2020, but this attempt was declined in 2021. The FCA subsequently withdrew charges linked to Sally Lavington Osunkoya following the guilty pleas of Mr. Osunkoya.

Since 10 January 2020, the FCA has held responsibility as the anti-money laundering and counter-terrorist financing supervisor for cryptoasset businesses in the UK. As of now, there are no legally operating crypto ATMs recognized within the country.