As the number of bitcoin ATMs soars, one crypto analytics firm suggests they are increasingly being used to sidestep anti-money laundering (AML) controls.
In its Spring report, published earlier this month, analytics company CipherTrace found bitcoin ATMs were frequently used to send funds to “high-risk exchanges” – trading platforms the company considers to be known for facilitating criminal activity and money laundering.
“The percentage of funds sent to high-risk exchanges from U.S. BATMs [bitcoin ATMs] has seen exponential growth, doubling every year since 2017.” the report reads. While approximately 2% of U.S. transactions went to high-risk exchanges in 2017, that number is now knocking at the 8% mark.
While they may somewhat resemble a cash-based machine, a bitcoin ATM enables people to buy and sell bitcoin as well as other cryptocurrencies directly from an exchange, using bank cards or even hard cash. Crucially, users don’t need to have a digital wallet: The machines create them, providing users with printouts of the wallet addresses and private keys.
CipherTrace also highlighted that the vast majority of U.S. bitcoin ATM transactions in 2019, around 88%, sent funds to offshore destinations.
“[B]itcoin ATMs are likely to be the next major regulatory target,” the report predicts.
This coincides with an explosion in the number of new bitcoin ATMs coming to market. Globally, there are roughly 60% more installed now than there were this time last year, according to Coin ATM Radar. The current figure of over 8,300 machines is up from around 5,000 in June 2019.
What’s also interesting is the rate of installations has doubled since the start of 2020. While around 1,000 more were added between June and December 2019, in the past six months or so another 2,000 new ATMs have gone online.
Since March alone, more than 1,000 new ATMs have been installed….