“Many BTM operators feel that merely asking for a cell phone number is enough due diligence to absolve them of their mandated KYC requirements,” a Coinsource exec said.
Major Bitcoin (BTC) ATM operators in the United States are joining forces to fight illicit activity related to Bitcoin ATMs.
Bitcoin ATM operators DigitalMint and Coinsource have launched the Cryptocurrency Compliance Cooperative (CCC), a new association that aims to establish compliance standards for the Bitcoin ATM industry.
The new compliance effort has launched with support from major blockchain analytics firms, such as Chainalysis and Elliptic, among its 15 initial members. The CCC is now encouraging participation from cash-based crypto money services businesses, regulators, financial institutions, as well as non-state and law enforcement agencies.
The association specifically targets Bitcoin ATMs to ensure Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance, as this type of ATMs is often associated with a lack of KYC requirements.
Seth Sattler, director of compliance for DigitalMint and leading CCC contributor, said that illicit use cases related to the Bitcoin ATM industry are well documented by several law enforcement agencies, including fraud, elder abuse and drug and human trafficking.
While a small number of Bitcoin ATM operators go above and beyond with KYC and AML protocols, others in the cash-to-crypto industry simply turn a blind eye and are complacent to these bad actors by simply applying the bare minimum customer protections, which in many cases allow for completely anonymous transactions,” Sattler noted.
Similar to a traditional ATM, a Bitcoin ATM, or a BTM, is a kiosk allowing users to purchase or sell Bitcoin and other cryptocurrencies by using cash or debit card. According to data by BTM tracking website How Many Bitcoin ATMs, there are currently more than BTMs in the United States.