On 30 September 2024, the UK Financial Conduct Authority (UK FCA) made a landmark announcement regarding the conviction of Olumide Osunkoya, who pleaded guilty to five significant offences at Westminster Magistrates’ Court. This case marks the UK’s first-ever conviction for operating an illegal network of crypto ATMs, a groundbreaking moment in the enforcement of crypto regulations. Osunkoya’s network of at least 11 crypto ATMs, which processed over £2.6 million in transactions between December 2021 and September 2023, operated without FCA registration, circumventing vital anti-money laundering safeguards. The court heard how Osunkoya, undeterred by the FCA’s refusal to register his business in 2021, expanded his operations in convenience stores across the UK, facilitating illegal transactions without performing due diligence or verifying the sources of funds. In addition to these regulatory breaches, he was charged with creating false documents, using a fake alias to evade detection, and possessing criminal property. His sentencing, which could result in a lengthy prison term, will take place at Southwark Crown Court, underscoring the FCA’s commitment to combating financial crime in the rapidly evolving crypto sector.
The court heard that Mr. Osunkoya illegally operated at least 11 crypto ATMs across the UK, which processed over £2.6 million in transactions between 29 December 2021 and 8 September 2023. Despite being denied FCA registration in 2021, he continued expanding the network, placing the machines in local convenience stores without conducting proper customer due diligence or checking the sources of funds for transactions. Evidence presented to the court suggested that individuals engaged in money laundering and tax evasion were likely using these ATMs.
In addition to running unregistered ATMs, Mr. Osunkoya was found guilty of creating and using false documents, including the use of a false alias to evade FCA regulations. He is also charged with the possession of £19,540 in cash, suspected to be proceeds from the illegal crypto ATM operations.
The charges fall under multiple legal provisions, including UK Regulations 86 and UK Regulations 92 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs), which cover unregistered cryptoasset activity. Mr. Osunkoya is also facing charges under the UK’s Forgery and Counterfeiting Act 1981 for the creation and use of false documents and under the UK Proceeds of Crime Act 2002 for possession of criminal property. The maximum sentences for these offences range from 2 years for unregistered operations to 10 years for forgery and 14 years for possession of criminal property.
This is the first time an individual has been prosecuted in the UK for running a network of illegal crypto ATMs. Mr. Osunkoya had previously applied for registration through his company, Gidiplus Ltd, but was refused in 2021. His actions continued despite the refusal, leading to this conviction.
