Vancouver, the first city, to allow installation of Bitcoin automated teller machines (ATMs) is now considering banning bitcoin ATMs, the only reason for doing so is due to money laundering issues. The Next Web revealed the news on June 5.
Vancouver Police Department thinks Bitcoin ATMs over the years, has become a perfect money laundering tool. The mayor of Vancouver is considering banning Bitcoin ATMs across the city.
Vancouver mayor, Kennedy Stewart has continuously suggested imposing a blanket ban on bitcoin ATMs. Over recent times, money-laundering cases have significantly increased; because of this, the mayor of Vancouver intends to implement this step.
The Next Web revealed a police report which claims criminals might buy a bitcoin ATM to satisfy their own needs for a few thousand dollars and later deposit their cash into that ATM as many times as they want to profit or avoid the transaction charges.
In Vancouver city, the first bitcoin ATM was installed in 2013 at a Vancouver coffee shop. The Bitcoin ATM was developed with a palm scanner in order to protect users from performing transactions of more than $3000 CAD each day.
However, officers claim that within this year, the department hopes to register a maximum of 840 reports of digital currencies. Cases related to digital currencies are increasing every year, and this year, the number has increased by threefold in comparison to the 2018 year.
Due to money-laundering issues, Vancouver councils, cities of Richmond have already decided to take action of banning bitcoin ATMs, the British Columbia province – the first province to plan for investigation by conducting an inquiry in money laundering case.
According to the source, as of now, Canada consists of 694 cryptocurrency ATMs, out of which 76 are located in Vancouver. These 76 crypto ATMs have been under the police fire due to regulatory problems.
Sergeant Alvin Shum in February 2019 targeted the bitcoin ATMs and the concept of blockchain technology. He stated in a report to the Police Board of Vancouver, reads as follows:
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.
Further, Shum said, failing to develop a strong regulation will allow for petty crime to evolve. The money laundering cases, increased by 350 percent within 2017 and 2016 and in 2018- they have increased by 250 percent.
It’s difficult to know how many cases are related to the use of digital currency ATMs. Shum mentions the fraudster uses high-pressure methods that allow victims to remove a large sum of cash and deposit it in a Bitcoin ATM to a given bitcoin address. The scams mostly target elderly citizens and foreigners and aim at the weaker section of the population.
Vancouver city lacks crypto regulations and also lacks the framework to carry such kind of transactions on their ATMs. Majority of bitcoin ATMs uses a cellphone number or text verification code to perform transaction of more than $1,000. ATMs daily transaction limits to $3,000, but a source reports that the few machines have no limits at all.
To impose a ban on Bitcoin ATMs is currently being examined by the Vancouver city staff and they are expected to submit the research report in Q4 of 2019, The mayor’s director of communications, Alvin Singh mentioned The Star.