The Financial Conduct Authority (FCA) of the United Kingdom has initiated criminal proceedings against Olumide Osunkoya, marking the first case in the UK involving charges related to operating a network of cryptocurrency automatic teller machines (ATMs). Osunkoya stands accused of running an extensive network of unregistered crypto ATMs and is facing multiple charges for violations of financial regulations.
Allegations and Charges
Osunkoya’s ATM network, according to the FCA, processed approximately £2.6 million ($3.4 million) in cryptocurrency transactions between December 29, 2021, and September 8, 2023. The charges against Osunkoya include two breaches of the UK’s Money Laundering Regulations (MLRs), formally known as the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. These regulations are designed to prevent money laundering and terrorist financing.
In addition to these violations, Osunkoya faces two charges under the Forgery and Counterfeiting Act 1981, related to the creation and use of false documents. He is also charged with one count of possessing criminal property under the Proceeds of Crime Act 2002. Osunkoya is scheduled to appear in court on September 30.
Therese Chambers, the FCA’s joint executive director of enforcement and market oversight, emphasized the seriousness of the situation:
“If you’re illegally operating a crypto ATM, we will stop you. […] If you’re using a crypto ATM, you are handing your money directly to criminals. Criminals can exploit crypto ATMs to launder money globally.”
While Osunkoya is the first individual charged with operating an illegal network of crypto ATMs in the UK, this case follows a related arrest earlier in April 2023. Habibur Rahman, who managed a single unlicensed crypto ATM, was apprehended and is currently out on bail, awaiting a court appearance on October 10. Rahman faces charges for operating without proper registration and for allegedly laundering £300,000 ($392,000) in criminal proceeds.
Regulatory Environment for Crypto ATMs
As of now, there are no legally operated crypto ATMs in the UK. The FCA mandated the closure of all unregistered crypto ATMs in March 2022, effectively eliminating legal crypto ATM operations within the country. Following this, the FCA began enforcement actions against illegal ATMs in February 2023, continuing throughout the year to address the proliferation of unregistered machines.
Osunkoya is the director of Gidiplus Limited, a company specializing in crypto ATM services. In an effort to comply with regulations, Gidiplus applied in November 2021 to become a registered crypto asset exchange provider. However, this application was denied, and the company’s subsequent appeal was also unsuccessful. Under Regulation 92 of the MLRs, company officers can be held accountable for regulatory offenses committed by their organization if these offenses occurred with their consent or due to their negligence.
The charges against Olumide Osunkoya represent a significant development in the FCA’s ongoing efforts to regulate the cryptocurrency sector and combat illegal activities associated with digital assets. The lack of legal crypto ATMs in the UK underscores the stringent regulatory environment surrounding cryptocurrency transactions and the FCA’s commitment to enforcing compliance within this emerging sector.
