Bitcoin ATMs are not currently governed by EU money laundering regulations, and arrests coordinated by Spanish police and Europol in May are bringing new focus to this loophole. A group of eight Spanish and Latin American individuals have been arrested, along with several of their associates, for using crypto ATMs to fund drug traffickers in Columbia. While large cryptocurrency exchanges worldwide are subject to increasing oversight and regulation, bitcoin ATMs often fall in legal gray areas, prompting debate amongst regulators and crypto users alike.
Trouble in Vancouver
Back in June, police in Canada commented that the convenient crypto exchange hubs effected by bitcoin ATMs are “an ideal money-laundering vehicle.” According to a report from the Vancouver P.D. to the police board in February:
The other issue with unregulated Bitcoin ATMs is that they are an ideal money laundering vehicle. Since there are no requirements to register any customer details, it is easy to see how cash can be transferred into Bitcoin and vice versa. A user can also launder an unlimited amount of money using smaller transactions so as not to arouse suspicion, like they would at a regular bank.
Now, the mayor himself is pushing for direct bans on the ATMs. This is notable since the first ever bitcoin ATM was installed in a Vancouver coffee shop in 2013. The city is currently host to over 70.
Japan, often known as the world leader for crypto adoption and regulation, has already tackled the issue with a set of iron-fisted legal protocols of its own. Though just years ago Tokyo bitcoiners could easily find multiple ATMs allowing easy exchange from bitcoin to fiat or vice versa,