US crypto ATM operators have formed the Cryptocurrency Compliance Cooperative (CCC) to improve security and AML compliance.
The cooperative includes the following banks and organizations: Anti-Human Trafficking Intelligence Initiative, Chainalysis, CipherBlade, Coinsource, DigitalMint, Elliptic, Halo Privacy, Maya, Metropolitan Capital Bank, Palmera Consulting, Royal Business Bank, Surety Bank, The Knoble, Titan Bank and Trust Stamp. According to the CCC, in 2020, users lost about $ 500 million as a result of cryptocurrency fraud, and more than 10,000 ATMs allow you to anonymously exchange stolen cryptocurrencies.
DigitalMint’s head of compliance, Seth Sattler, said most ATMs do not implement even minimal customer protections. Bo Oney, Executive Vice President of Operations at Coinsource, added that with many ATMs, it is sufficient to provide a mobile phone number instead of going through a full KYC procedure.
“By doing this, the ATM operators condone criminals who use Bitcoin to commit fraud or drug trafficking, and they themselves create the conditions that allow for the abuse of ATMs,” Bo Oni said.
CCC’s mission is to legitimize the exchange of cryptocurrencies for cash and vice versa through the implementation of specific standards. They should be aimed at improving the security of cryptomats, as well as meeting the requirements of the KYC procedure and the rules for combating money laundering (AML). This will be possible through the interaction of crypto ATM operators with regulatory and law enforcement agencies, traditional financial institutions and technology firms.
CCC members plan to organize quarterly conferences at which they will share information about new regulations and industry standards related to cryptocurrencies, as well as the results of their own research. In addition, the members of the cooperative will think over “strategies to get ahead” of attackers in order to reduce the risks of using cryptomats for illegal purposes.
“Compliance with regulations and the use of cryptocurrency ATMs for money laundering have damaged their reputation for a long time. Therefore, we are delighted to support an initiative led by two leaders in this industry to restore confidence in ATMs. This will reduce risk and increase people’s financial freedom, ”said Caitlin Barnett, Chief Compliance Officer at Chainalysis.
According to a report from the US Drug Enforcement Administration’s Strategic Intelligence Division, drug traffickers are increasingly using cryptocurrency ATMs to launder money. According to Coin ATM Radar estimates, the number of ATMs increased by 71% in 2021, and in July their total number worldwide exceeded 24,000 devices.
