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UK Crypto ATM Operator Jailed for 4 Years: The First Prosecution of Its Kind

In a landmark case for the United Kingdom’s financial regulation system, a man who illegally operated a network of crypto ATMs was sentenced to four years in prison. This case represents the first criminal conviction related to unregistered cryptoasset activity in the country. Olumide Osunkoya, a 46-year-old British man, was found guilty of operating an illegal crypto ATM network worth over £2.5 million, and his case serves as a clear warning to others who might attempt to bypass regulations in the growing cryptocurrency space.

Between December 2021 and September 2023, Osunkoya ran a network of crypto ATMs, enabling users to convert traditional currency into cryptocurrency without the proper regulatory oversight or compliance checks. The Financial Conduct Authority (FCA), which oversees the financial market in the UK, had previously refused Osunkoya’s company, GidiPlus Ltd., registration to operate crypto ATMs. Despite this refusal, Osunkoya continued his operations, transferring machines to new locations and using false identities to conceal his activities. This illegal operation has now resulted in a significant legal consequence, and the case underscores the importance of adhering to the regulatory framework surrounding cryptocurrencies.

Crypto ATMs have become a growing trend in many parts of the world, offering users a convenient way to purchase or sell cryptocurrencies like Bitcoin and Ethereum. However, these machines often fall into a regulatory grey area, especially in countries like the UK, where the crypto market remains largely unregulated. In the UK, the FCA has made it clear that it is illegal to operate a crypto ATM without the proper registration. This means that operators must go through a stringent registration process to ensure compliance with anti-money laundering (AML) and counter-financing of terrorism (CFT) rules, among other financial regulations.

Despite the FCA’s clear guidelines, the rise of crypto ATMs has led to several operators attempting to bypass these regulations. Osunkoya’s case is just one example of how some individuals exploit the crypto ATM model to carry out unregistered activities. Crypto ATMs provide an easy access point for users to enter the world of digital currency without having to go through traditional financial institutions. However, without proper oversight, these machines can also be used for illegal activities, including money laundering and fraud.

In 2023, the FCA and law enforcement agencies took action to curb the rise of unregistered crypto ATMs. The FCA conducted site visits to over 30 locations across the UK and successfully disrupted 30 machines. CoinATMRadar, a popular online resource that tracks crypto ATMs globally, reported that the number of crypto ATMs in the UK dropped significantly between 2022 and 2024, from more than 80 to none.

Osunkoya’s Illegal Crypto ATM Network

Between December 2021 and March 2022, Osunkoya, through his company GidiPlus Ltd., operated crypto ATMs across 28 locations. His business was operating illegally because the FCA had rejected GidiPlus Ltd.’s registration application. Despite this refusal, Osunkoya continued to place machines at various locations, allowing customers to convert cash into cryptocurrencies.

To avoid detection, Osunkoya later transferred the operation of these machines to a reduced network of up to 12 ATMs. He did so under a false name and a different company, GidiPlus Ltd. This was an attempt to evade the regulators and law enforcement agencies, demonstrating his calculated and deliberate attempt to bypass the law. Furthermore, Osunkoya failed to carry out necessary checks to ensure that the ATMs were not being used for illegal activities, such as money laundering.

Osunkoya’s actions were not limited to the illegal operation of crypto ATMs. He was also convicted for forging identity documents and possessing criminal property. His involvement in multiple illegal activities highlighted the risks associated with unregulated crypto machines, where there is little to no oversight to prevent criminal misuse.

The FCA’s Enforcement Efforts and the Case’s Impact

The conviction of Olumide Osunkoya represents a significant milestone for the FCA and its efforts to clamp down on illegal crypto operations in the UK. The FCA’s proactive approach in investigating and disrupting illegal crypto ATM networks has helped to protect the public and ensure that crypto activities are conducted within the boundaries of the law.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, emphasized the importance of this case, stating, “This is the UK’s first criminal sentencing for unregistered crypto activity and sends a clear message: those who flout our rules, seek to evade detection, and engage in criminal activity will face serious consequences.” This statement reinforces the FCA’s commitment to cracking down on unregistered crypto activity and holding individuals accountable for their actions.

The FCA’s role in regulating the cryptocurrency industry has become increasingly important as the popularity of digital currencies grows. Although crypto markets offer a range of benefits, they also come with significant risks, especially in terms of financial crime and fraud. The FCA continues to advise consumers that investing in crypto carries a high level of risk and that individuals should be prepared to lose all their money. The lack of regulation in the sector means that many crypto transactions are not subject to the same level of scrutiny as traditional financial systems, making it more difficult to detect fraudulent activity.

Conclusion: A Warning to Crypto ATM Operators

Olumide Osunkoya’s case serves as a stern warning to anyone considering operating crypto ATMs in the UK without the proper registration and regulatory approval. The FCA has made it clear that it will take a tough stance on unregistered crypto activity, and the conviction of Osunkoya is just the beginning. As the crypto landscape continues to evolve, regulators will need to remain vigilant to ensure that these systems do not become breeding grounds for criminal activity.

For businesses operating in the cryptocurrency sector, this case highlights the importance of ensuring full compliance with all regulatory requirements. The rise of crypto ATMs provides significant opportunities for growth in the digital currency space, but these opportunities must be pursued within the boundaries of the law. Failure to comply with regulations can lead to severe legal consequences, as demonstrated by Osunkoya’s four-year prison sentence.

Crypto ATM operators must also be aware of their responsibility to conduct thorough checks to prevent the use of their machines for illicit purposes. This means implementing robust anti-money laundering (AML) protocols and ensuring that customers are properly vetted before using the machines. In addition to regulatory compliance, operators must also be prepared for potential criminal investigations if they fail to meet these requirements.