Bitcoin ATM operators forms cooperative to tackle illicit activity

To fight criminals using Bitcoin ATMs in the US, operators have formed an association that will work with financial, law enforcement agencies

In order to fight illicit activity related to Bitcoin, United States based Bitcoin ATM operators have announced the launch of Cryptocurrency Compliance Cooperative (CCC).

The cooperative aims to establish compliance standards for the Bitcoin ATM industry. It will also create a safer environment for all consumers and legitimize the cash-to-cryptocurrency industry by bolstering compliance standards that are deemed by many to be currently insufficient.   


Commenting on this development, Seth Sattler, Director of Compliance for DigitalMint and leading member of the Cryptocurrency Compliance Cooperative (CCC) said, 

“While a small number of Bitcoin ATM operators go above and beyond with know your customer (KYC) and anti-money laundering (AML) protocols, others in the cash-to-crypto industry simply turn a blind eye and are complacent to these bad actors by simply applying the bare minimum customer protections, which in many cases allow for completely anonymous transactions.”

The problem plaguing this industry are well documented by several law enforcement agencies, and include fraud, elder abuse, and drug and human trafficking, Sattler added.

 In the State of New Jersey Commission of Investigation report it was found that nearly 50% to 75% of the BTM operators with kiosks allowed transactions to take place with just a cellphone number, or in some cases, no information at all. 

"The CCC is seeking to bolster regulatory requirements for the benefit of all BTM users and operators.  This will require input from the most knowledgeable in the industry, all with the goal of making the cash-to-crypto space as safe as possible for consumers,”

- Bo Oney, Executive Vice President of Operations and Head of Compliance at Coinsource.

Over 42,000 BTMs in the US

Similar to a traditional ATM, a Bitcoin ATM popularly known as BTM is a kiosk allowing users to purchase or sell Bitcoin and other cryptocurrencies by using cash or debit card. 

According to BTMs tracker portal, today, there are more than 42,000 BTMs in the US, which has recorded a huge growth as compared to previous year.

CCC also called on organizations including cash-based cryptocurrency MSBs, regulatory bodies, financial institutions, suppliers, non-governmental and law enforcement agencies to join them. 

DEA says BTMs used for money laundering

It was reported in March 2021 quoting the Drug Enforcement Administration (DEA) of the US Department of Justice that during 2020 drug traffickers relied on Bitcoin automated teller machines (BTMs) to carry out illicit money transfers. 

The agency’s report findings reveal that in 2020 these BTMs served criminals to make cross-border transfers, avoiding them having to physically transport the money. This, because international shipments, particularly between the US and Mexico, were suspended for much of last year due to the coronavirus pandemic.

An official of CipherTrace, a blockchain analytics company, has said that BTMs would face stricter regulations worldwide, with countries including Canada and Germany already moving to strengthen necessary AML regulations.

Members will learn on how to collaborate with industry leaders, regulators, and law enforcement on how to enforce deeper and more robust compliance protocols. In addition to best mitigate fraud through the application of ever-improving technology and forensic tools, the association said.

The association members include Bitcoin ATM (BTM) operators DigitalMint and Coinsource, blockchain analysis platform Chainalysis, Anti-Human Trafficking Intelligence Initiative, Halo Privacy, Metropolitan Capital Bank, Palmera Consulting, Royal Business Bank, Surety Bank, The Knoble, Titan Bank, Trust Stamp, among others.

The initiatives of CCC if implemented will really help the BTM operators shelve the tag of being a platform for criminals for moving their illicit money globally.

Jagdish Kumar,

Klever Writer