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Crypto ATMs (also popularly known as Bitcoin ATMs) are designed to help facilitate crypto transactions. Like the everyday familiar ATMs, these machines allow crypto users to make seamless withdrawals at any of the locations in which the machines are situated.
Sadly, crypto ATMs could also be a great tool for money laundering in the wrong hands. This is just another example of a ‘good innovation’ being used for bad things. Well, it seems that Vancouver isn’t taking that. According to The Star, Vancouver is an inch away from putting these machines out of the street for good. Vancouver currently houses a total of 60 crypto ATMs spread across coffee shops, malls, and convenience stores.
The local police department has sent out several warnings, asking crypto users to be cautious of these machines and cryptocurrency as a whole, as they could be ‘an ideal money-laundering vehicle.’ This warning follows the alarming rise in crypto-related crimes in Canada. Tons of hundreds of crypto-related crimes are reported every year. A police report stated that the police department recorded a 350% increase in crypto crimes in 2017 compared to 2016. It also predicts a 300% increase this year compared to the figure recorded in 2018.
These alarming figures are of great concern to local authorities, and Mayor Kennedy Stewart suggests an outright ban of crypto ATMs in the country.
Unlike conventional ATMs and other money-service businesses, crypto machines are not regulated by the federal anti-money laundering laws. Thus, making it a good breeding ground for all sorts of financial crimes. In fact, a report has it that a crypto firm was duped several thousands of dollars; the suspect reportedly initiated several transactions and canceled each and every one of them just before the company could process the withdrawal. This is just one of several ways that these machines could be used for malicious transactions.
Regulating Crypto ATMs
Earlier this year, the city council passed a motion to create a bylaw aimed at regulating the use and operation of crypto ATMs. The law is intended to create a safer environment, as it will pay close attention to requirements for identification, which will be used to verify the sender and receiver of funds through the crypto ATMs. Additionally, this law is also proposed to regulate requirements for a business license and requirements to advertise common frauds.
Although some cryptocurrency companies stated that they incorporated some safety measures such as limiting the amount a person can withdraw per day, the Mayor at council meeting on 28th of May suggested an outright ban of the machines, and his staff are currently researching on the issue. We hope to get the final decision towards the end of the year.
Well, this indeed calls for a drastic solution. However, is an outright ban the solution?