Bitcoin ATMs have become “an ideal money-laundering vehicle,” according to the Vancouver Police Department, prompting a proposed city-wide ban by the mayor, and potential federal legislation, The Star reports.
The 76 machines within the city limits have come under police fire twice already this past year due to perceived regulatory issues. Though, most recently in February 2019, Sergeant Alvin Shum took aim not only at Bitcoin ATMs, but also the ideological underpinnings of blockchain generally. He wrote, in a report to the Vancouver Police Board:
“Given the lack of a central authority, there is no controlling organization who can monitor or regulate the transfer of funds to ensure a legitimate transaction. This creates a prime opportunity for the criminal element to capitalize on remaining anonymous, as they work to defraud unsuspecting citizens, launder money, and make large-sum anonymous transactions.”
This lack of regulation, Shum said, will allow for the incubation of organized and petty crime. Indeed, he points to the rising trend of cryptocurrency police filings in Vancouver year over year, which increased 350% from 2016 to 2017, and saw a further 250% increase in 2018.
Current reporting rates indicate the Metro Police will receive 840 reports this year, on track for a 300% increase in reports from 2018.
It is unclear how many of these crimes were directly tied to the use of cryptocurrency ATMs, though Shum spoke of a “high-pressure” tactic employed by fraudsters to direct victims to withdraw large amounts of cash and deposit it in a Bitcoin ATM to a predefined Bitcoin address. These scams target the most vulnerable segments of the population including recent immigrants and the elderly.
Since Shum wrote to the police council, 15 new machines have been added to the Vancouver metro area, according to coinatmradar.com.
In January, the city council suggested a bylaw to “regulate the use and operation of cryptocurrency ATMs, including the requirement for a business licence, requirement for signage to advertise common frauds, requirement for identifications to be used to verify the sender and receiver of funds and requirement of security features.”
Four months later, at a May 28 council meeting, Mayor Kennedy Stewart pushed for the outright ban crypto ATMs in the city. Defenders of the machines cite the utility for people who have transaction limits on their bank accounts, and the convenience for conducting cryptocurrency transactions. The third largest metropolitan area in Canada, Vancouver only hosts about 12% of the nation’s total crypto ATMs.
The first bitcoin ATM ever was installed at a Vancouver coffee shop in 2013, which contained a built-in palm scanner designed to prevent users from processing more than $3000 CAD per day.
“We don’t want drug dealers sending a bunch of coke to the States and then withdrawing cash,” said one of the machine’s owners as it was unveiled at its location in 2013. “We don’t want these to turn into money laundering machines; that’s the worst thing that could happen.”
Currently, Vancouver lacks standardization for the types of transactions that can be performed on its ATMs. Some machines require a cellphone number and text verification for transactions over $1,000, while for others push the limit to $3,000, according to CoinATMRadar.com. A few machines advertise no limits at all, according to The Star.
A decision regarding the regulation, monitoring, or ban of crypto ATMs is currently being researched by city staff who will report back in the fourth quarter of 2019, Alvin Singh, the mayor’s director of communications, told The Star.
- Source: First Appeared Here
- Published Time: 2019-06-07 19:00:24
The views and opinions expressed in the article Vancouver Saw the First-Ever Bitcoin ATM. Now Its Mayor Wants to Ban Them do not reflect that of 48coins, nor of its originally published source. Article does not constitute financial advice. Kindly proceed with caution and always do your own research.
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