CipherTrace monitored the transactions made from the US-based Bitcoin ATMs over several years. It reported the amount was 74% last year, 88% of which was transferred overseas. In other words, the report proved that 88% of the transference that happened using the US ATMs were used to send virtual currency exchanges overseas. Since the amount is doubled annually starting from 2017, the figure displays a noticeable growth of the problem over recent years.
Some other clues that helped the prediction are the fact that Canada and Germany have already started the regulations. Canadian firms imposed new regulations for virtual currencies. The news was reported two days after the new regulation, and CipherTrance reported it. The CEO of Canadian crypto-asset exchange BullBitcoin, Francis Pouliot, tweeted regarding the regulations on May 29:
“Today is my last day as an unregulated dealer in virtual currency. As of June 1, 2020, Bitcoin exchanges and payment processors are officially regulated as Money Services Businesses in Canada.”
He was the same person, who spend over 10 years of his life fighting for Canada’s crypto recognition by governments and legal sectors. He has been the Bitcoin Foundation Canada’s director of public affairs since 2014. He explained the intricate process, he went through stating, “It took five years to agree/negotiate what specific activities are covered and the technicalities of regulation.”
Interestingly, in response to this tweet, someone tweeted, “I went to prison for selling 9.998 BTC for $9,260.80 in 2014, Unlicensed Money Transmission, which used the Banking Secrecy Act 1970 a 50+-year-old law applied to #Bitcoin.”
Pouliot clarified the new legislation, stating that it mostly affects the swap of crypto for cash. He further added Bitcoin ATMs are the basic for crypto-cash exchange, which is why they are affected the most. Knowing the total number of ATMs worldwide is 7,958, and the number of Canada is 778, we can conclude that roughly 10% of the ATMs are located in Canada.
As mentioned before, Germany was another country taking action against unlicensed Bitcoin ATMs. The German Financial Market Authority (BaFin) started considering the point in March 2020. As a result, they focused on completing previously legislated cryptocurrency regulations to reduce money laundering.
But Canada and Germany are not the only countries worried about this issue. Spanish government stated their concern as well after the Spanish government imprisoned a local gang after laundering around $10 million from the Bitcoin ATMs. Spain declared the crypto ATMs is a blind-spot in European anti-money laundering (AML) regulation.