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How Safe Are Bitcoin ATMs?

Law enforcement in Spain has uncovered a local gang that uses Bitcoin ATMs to transfer more than $10 million for drug traffickers in Colombia and other countries. They pointed out that Bitcoin (BTC) Automatic Teller Machines (ATMs) show a gap in Europeans Union’s Anti-money laundering regulations.

An anonymous representative of Guardia Civil (a type of Spanish law enforcement) claims that a group hired two machines from a trading platform and had them installed in an office in Madrid. Rules designed to force money handlers to vet their clients don’t apply to the cash machines’ owners or to cryptocurrency trading platforms, according to the drug-enforcement officials from the Guardia Civil.

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Bitcoin ATMs are relatively new and spreading rapidly as most modern ATMs fully support it and simply need a software upgrade. The number has quickly grown to 5400 machines, Spain having 89 of those. A Spanish effort to prosecute a gang that used Bitcoin automated cash machines suspected of being a front for illegal-drug payments has exposed a hole in European anti-money-laundering controls, law-enforcement authorities in the country said.

People linked to the group, who registered at the platform’s office using false identities, would deposit cash in the machines and receive a QR code or a numerical code with which they could claim their cryptocurrencies from the exchanges. Those Bitcoins could then be sent to the drug traffickers who could cash them in.

Canada has also been considering banning bitcoin ATMs due to money laundering concerns, while this might not be the best call, it might be just better to simply adjust the software and bring in more precautions to prevent this from happening. A huge part of this is due to independent Bitcoin ATM owners, who don’t have to abide to current or future regulations that might prevent this, causing a breach that money launderers will undoubtedly exploit.

Disclaimer - OBN is an informational website which aims to give the latest blockchain related news to the readers. Articles on OBN should not be considered as investment advice. Trading cryptocurrencies is a high-risk investment, every user is advised to consult an expert before making any decisions.