Crypto ATM: more regulation required

As the spread of cryptocurrency ATMs is accelerating, a recently released report by the U.S. Government Accountability Office (GAO) says the devices are widely used to facilitate payments for criminal acts, such as human trafficking and selling. of drugs. With this in mind, the report calls for strengthening supervision of crypto kiosks.

In its recommendations, the government agency says it proposes that The Financial Crimes Enforcement Network (FinCEN) and the Internal Revenue Service (IRS) review the registration requirements of crypto kiosks. According to the report, both institutions agree with the GAO's proposal.

“Although kiosk operators are required to register with FinCEN, they are not required to regularly report the specific locations of their kiosks. This limits the ability of federal agencies to identify kiosks in areas that have been designated as high risk for financial crime and could involve human and drug trafficking, ”the agency said.

The GAO argues that reviewing registration reporting requirements and taking necessary and appropriate actions to better identify individual kiosk locations could help FinCEN and IRS identify high-risk kiosk operators to monitor for compliance, as well as to improve the information available to law enforcement to identify potentially illegal transactions.

Data provided by the kiosk crowdsourcing website Coinatmradar.com suggests that last year brought a notable increase in the number of crypto ATMs around the world. Between January 1, 2021 and January 1, 2022, the number of such devices grew from 14,040 to 34,169 worldwide. Of these, around 29,963 crypto ATMs have been installed in the United States.

To justify its call for stricter regulations on cryptocurrency kiosks, the GAO cited a July 2020 study by the social justice movement Polaris Project, which suggested that cryptocurrencies are “the second most commonly accepted payment method out of 40 platforms in the online commercial sex market ”.

The agency's report also referred to the findings of the United States Department of Justice (DOJ) that cryptocurrencies "are increasingly being used to buy and sell illegal drugs on dark web markets and by drug cartels to launder their profits. ".

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