The Financial Conduct Authority (FCA) said it has used its powers to enter and inspect several sites around Leeds suspected of hosting illegally operated crypto ATMs.
No crypto ATM operators currently have FCA registration.
The FCA said it gathered evidence from several sites around Leeds as part of a joint operation with West Yorkshire Police’s Digital Intelligence and Investigation Unit.
Crypto ATMs are machines which allow customers to buy or convert funds into cryptoassets.
Cryptoasset exchange providers, which include crypto ATM operators, in the UK must be registered with the FCA and comply with the UK Money Laundering Regulations.
This includes operators of crypto ATMs.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said: “Unregistered crypto ATMs operating in the UK are doing so illegally.
“We will continue to identify and disrupt unregistered crypto businesses operating in the UK.
“Crypto businesses operating in the UK need to be registered with the FCA for anti-money laundering purposes.
“However, crypto products themselves are currently unregulated and high-risk, and you should be prepared to lose all your money if you invest in them.”
Det Sgt Lindsey Brants of the Force Cyber Team at West Yorkshire Police said: “Having conducted intelligence gathering work across West Yorkshire, we soon established the locations of several live crypto ATMs.
“Warning letters were issued requesting the operators cease and desist using the machines and that any breach of regulations would result in an investigation under money-laundering regulations.
“We then shared our findings with the Financial Conduct Authority.
“We are pleased to be able to work in partnership with the FCA in what we believe is a national first here in West Yorkshire.”
The FCA said it previously wrote to all operators and hosts warning of the legal consequences of failing to register with the FCA.
It said it is working with multiple law enforcement partners, including local police forces, to “disrupt and disable” illegal crypto ATMs.
The FCA said it will review evidence gathered during these visits “and consider further potential enforcement action.”