The Star reported recently that according to the Vancouver Police Department, Bitcoin ATMs have become “an ideal money-laundering vehicle,” This has prompted a city-wide ban to be proposed by the mayor, and potential federal legislation.
Perceived regulatory issues have caused these machines within the city limits to be under police fire twice already this past year. Bitcoin ATMs have totaled to about 76 in the city of Vancouver, the third largest metropolitan area in Canada; still, this is only a host to about 12% of the nation’s total crypto ATMs.
Sergeant Alvin Shum took aim at Bitcoin ATMs and added to that the ideological underpinnings of blockchain generally. This was the most recent incident from February 2019, the sergeant 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.”
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. At the time it was unveiled, one of the machine’s owners at its location said: “We don’t want drug dealers sending a bunch of coke to the States and then withdrawing cash,” “We don’t want these to turn into money laundering machines; that’s the worst thing that could happen.” This has, unfortunately, become the case.
Shum said this lack of regulation has allowed for the fostering of petty crime and organized crime as well as is already the case. To back that up with facts that cryptocurrency police filings had increased 350% from 2016 to 2017, and saw a further 250% increase in 2018. Apparently, this is an upcoming trend from about two years ago till now. The Metro Police will reportedly be in the same boat as current reporting rates indicate they will receive 840 reports this year, on track for a 300% increase in reports from 2018. Shum referred to crimes that may not have all been directly tied to the use of cryptocurrency ATMs but he did directly speak of “high-pressure”. These high-pressure tactics have criminals coercing victims to withdraw large amounts of cash and deposit it in a Bitcoin ATM to a predefined Bitcoin address. These mishaps have seen the most vulnerable segments of the population on its radar like recent immigrants and the elderly.
Reports reveal that 15 new machines have been added to the Vancouver metro area from the time after Shum wrote to the police council. January had seen the city council proffer that a bylaw should be used to “regulate the use and operation of cryptocurrency ATMs, including the requirement for a business license, 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.” Mayor Kennedy Stewart pushed for the outright ban crypto ATMs in the city about Four months later, at a May 28 council meeting as opposed to having bylaws for regulation.
The report by The Star revealed as well that a few machines advertise no transaction limits at all. Some require a cellphone number and text verification for transactions over $1,000 or push the limit to $3,000. Inherently, Vancouver lacks standardization for the types of transactions that can be performed on its ATMs. Conclusively, Alvin Singh, the mayor’s director of communications, told 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’
Credits – Daniel KuhnJOIN OUR COMMUNITY