Bitcoin ATMs to be subjected to stricter AML rules

Bitcoin ATMs are a quick and handy way for crypto users to cash out their digital funds. As a result, their number continues to grow, as companies continue to install them around the world. However, they are also quite concerning for the authorities around the world, who worry about their use for money laundering purposes.

In fact, experts believe that Bitcoin ATMs will soon start facing much stricter regulations. Some countries, such as Germany and Canada, are already working on proposals that would make requirements for these ATMs much harsher.

Bitcoin ATMs are used for sending money overseas

CipherTrace released a new report yesterday, June 2nd, estimating that approximately 74% of transactions made via ATMs in the US in 2019 were sent out of the country. In addition, around 88% of these funds were sent to crypto exchanges ended up transferred overseas.

These figures have been growing exponentially over the last several years. Experts also believe that they were doubling every year since 2017 onwards.

The company’s CTO, John Jeffries, also predicted in a recent interview that regulators will soon start focusing a lot more on Bitcoin ATMs. He believes that there is a need for “more uniform regulatory enforcement and compliance.“

Bitcoin ATM situation in Canada

Another new development that recently made headlines was the arrival of new regulations, regarding Canadian companies that deal with digital currencies as MSBs (Money Service Businesses).

Bitcoin Foundation Canada’s Francis Pouliot, as well as a crypto exchange known as BullBitcoin commented that the legislation will affect companies that exchange crypto for cash.

These regulations will mostly affect cash-based businesses like Bitcoin ATMs. Most Bitcoin businesses already had strict KYC measure in place to prevent fraudulent transactions (chargebacks) or because they were required to do so by their banking or payment processing partners

— FRANCIS – BULLBITCOIN.COM (@francispouliot_) May 31, 2020

Naturally, Bitcoin ATM operators will be impacted the most, as they now need to report any transactions that exceed $10,000 CAD.

Back in June last year, Canada saw the passing of the amended Proceeds of Crime (Money Laundering) and Terrorist Financing Act. This happened while the mayor of Vancouver was calling for a city-wide ban on crypto ATMs, once again, due to money laundering concerns.

Right now, Canada is home to around 10% of all crypto ATMs in the world — 778 of the 7,958 that exist globally.