Authorities in the United States clampdown on cryptocurrency ATMs allegedly used in human and drug trafficking
Due to their apparent link to illegal human and drug trafficking, bitcoin ATMs, which were constructed at an unprecedented rate in 2021, have come under increased investigation from US authorities.
Indeed, a study by the United States Government Accountability Office (GAO) recommended tightening registration requirements for crypto ATMs, blaming the kiosks for an increase in instances of trafficking activities.
The firm, which provides accounting and investigative services to the US Congress, discovered a link between the use of cryptocurrency payments to facilitate unlawful people and drug trafficking and the use of bitcoin ATMs in the report published on January 10.
“As the [crypto] market grows in popularity, FBI authorities anticipate a rise in the use of virtual currency kiosks for illegal activities, such as human and drug trafficking,” the article said.
ATMs that accept cryptocurrency are becoming more popular for unlawful transactions.
According to the GAO, which conducted an investigation into the use of bitcoin in international trafficking operations, ATMs are becoming more popular for making illegal transactions. Due to the fact that they are less regulated than crypto trading platforms, transactions conducted through kiosks are significantly more difficult to trace and identify.
According to the agency, the lack of information about the devices and the activities committed via them impairs law enforcement’s capacity to identify and capture perpetrators. While ATM kiosk operators are obliged to register with the Financial Crimes Enforcement Network (FinCEN), they are not obligated by law to divulge the location of their ATMs.
According to the GAO, this “reduces federal agencies’ ability to detect kiosks in areas labelled as high-risk for financial crime.” By tightening controls on cryptocurrency ATMs, authorities will get more visibility into their location and use, assisting in the discovery of “possible criminal transactions.”
According to the GAO, the report directed FinCEN and the Internal Revenue Service (IRS) to collaborate on evaluating the registration requirements for cryptocurrency kiosks and exchanges, and the agencies are expected to follow the guidance provided.
The GAO discovered that more than half of 40 significant online “commercial sex marketplaces” that “may be used to promote sex trafficking” accept bitcoin payments in total.
Additionally, it was determined that 36% of all US Immigration and Customs Enforcement investigations involving digital assets were linked to drug trafficking, as were 25% of all IRS investigations involving crypto-assets and 86% of US Postal Service investigations.