UK Courts Convict First Illegal Crypto ATM Operator

TLDR

• British citizen Olumide Osunkoya pleaded guilty to operating illegal crypto ATMs
• First UK conviction for unauthorized crypto ATM operation
• ATM network processed over £2.6 million in transactions
• Osunkoya faced charges including operating without FCA authorization
• Crypto ATMs were banned in the UK in 2022

In a groundbreaking case for the United Kingdom’s cryptocurrency landscape, Olumide Osunkoya, a British citizen, has pleaded guilty to operating an unauthorized network of cryptocurrency ATMs across the country.

This marks the first known conviction in the UK related to illegal crypto ATM operations since their ban in 2022.

Osunkoya appeared at Westminster Magistrates’ Court to face charges stemming from his operation of at least 11 crypto ATMs in convenience stores throughout the UK.

The illegal network processed transactions totaling over £2.6 million between December 2021 and September 2023.

The Financial Conduct Authority (FCA) had previously denied Osunkoya registration in 2021. Despite this rejection, he continued to operate the ATMs without proper authorization.

The machines allowed individuals to exchange cash for cryptocurrency, bypassing regulations designed to prevent money laundering and tax evasion.

Prosecutors revealed that Osunkoya failed to perform essential customer due diligence or verify the source of funds for transactions processed through his ATMs.

This negligence potentially facilitated criminal activities, as some users of the machines were suspected of money laundering and tax evasion.

The court heard evidence of Osunkoya’s attempts to evade detection and circumvent FCA regulations.

He created false documents using an alias and falsely claimed to have sold the ATM network to a nonexistent individual. These actions led to additional charges under the Forgery and Counterfeiting Act 1981.

Osunkoya’s illegal operation proved highly profitable, with the defendant earning between 10% and 60% on each transaction processed through his ATMs.

As a result, he now faces charges under the Proceeds of Crime Act 2002 for possessing £19,540 in cash, believed to be derived from his illicit activities.

The charges against Osunkoya include operating without FCA authorization and possession of criminal property. While sentencing is scheduled for a later date, this case sets a significant precedent in the UK’s efforts to regulate cryptocurrency transactions and combat financial crimes associated with digital assets.

The conviction comes in the wake of the FCA’s 2022 ban on crypto ATMs, which was implemented after no operators received the necessary licenses to operate legally in the UK.

This case demonstrates the regulatory body’s commitment to enforcing compliance within the cryptocurrency sector.

Law enforcement agencies and financial regulators are likely to increase their scrutiny of potential illegal crypto ATM operations following this conviction.

In fact, another individual, Habibur Rahman, was arrested last month on similar charges, indicating that authorities are actively pursuing cases of unauthorized crypto ATM operations.

This landmark case highlights the growing intersection between traditional financial regulations and the evolving world of cryptocurrencies.

It underscores the importance of compliance with existing financial laws and regulations, even as new technologies emerge in the financial sector.