Money Laundering Prevents Wide Acceptance of Bitcoin ATMs

Countries around the world are placing more stringent measures that will make the use of Bitcoin ATMs difficult.

Crypto and economic analysts around the world have seen that it won’t be easy to establish Bitcoin ATMs in several countries. Canada and Germany, for instance, may not accept it completely with their tight money landering policy.

CipherTrace reported on June 2 that nearly three quarters of Bitcoin ATM transactions in the US last year was about sending money out of the country. Even when the money was sent to exchanges, people preferred to send them to exchanges located outside the US. This has been the norm since 2017 and the number has been increasing since then.

The CTO of CipherTrace, John Jeffries, predicts that many regulatory bodies will soon shift focus to BATMs. He wishes that even if this happens, there should be a uniform regulatory policy for BATMs in most parts of the world.

Canada imposes stricter measures on Bitcoin ATMs

The report from CipherTrace came two days after Canada tightened the regulation of virtual currencies. In Canada, companies that deal with virtual currencies are now regarded as Money Service Businesses (MSBs).

Francis Pouliot who works at Bitcoin Foundation Canada explains that this development affects exchanges that give cash in exchange for crypto. This is even worse for those who operate on Bitcoin ATMs as they have to report any transaction that is above $10,000 CAD.

Canada amended their anti money laundering policy and Terrorist Financing Act in 2019 when the mayor of Vancouver suggested that all BATMs in the cities be stopped from operating as a result of money laundering.

Canada has 778 crypto ATMs says CoinATMradar. This is about one-tenth of the total 7,958 crypto ATMs around the world.

More Scrutiny for crypto outlets around the world

It was reported in July 2019 that a gang in Spain had helped some drug traffickers from Columbia to launder about $10 million.

In November 2019, the US Internal Revenue Service increased measures to check the activities of cryptocurrencies in a bid to prevent illegal usage. The IRS stated that BATMs and kiosks would cause tax problems if measures were not put in place.

In Germany, the Financial Market Authority (BaFin) went after Bitcoin ATM owners that were not licensed. This happened in March 2020 soon after the country amended its cryptocurrency regulations which was aimed at fighting money laundering.

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