The Manhattan District Attorney’s office has charged a man with running dozens of unlicensed across New York City, New Jersey and Miami.
Prosecutors say 35-year-old New York resident Robert Taylor operated a total of 46 Bitcoin ATMs across three cities and sold $5.6 million Bitcoin between 2017 and 2018. He took transaction fees of between 10–20%.
Taylor is accused of promising ATM users that his machines didn’t use cameras or require identity, in posts on social media. These promises attracted customers who had recently committed felonies.
Taylor surrendered yesterday, according to a statement given to Reuters by a spokesperson for the DA’s office. He is charged with tax fraud, false filings, and running an unlicensed money transmitter.
Read more in @MarketWatch about the Office’s indictment against the operator of dozens of illegal Bitcoin ATMs, which were placed in laundromats across New York City and used for illegal activity: https://t.co/NHemJvrlTe
— Alvin Bragg (@ManhattanDA) April 13, 2022
"Robert Taylor allegedly went to great lengths to keep his Bitcoin kiosk business as secret as possible to attract a clientele that would pay top dollar for anonymity," said Manhattan District Attorney Alvin Bragg Jr. in a press release. "As the use of cryptocurrencies like Bitcoin proliferate, they continue to attract a wide-range of bad actors who are hoping to evade law enforcement.” He added that, “we will not allow digital currencies to become safe havens for illegal activity."
Bitcoin ATMs and the law
Bitcoin ATMs are not illegal provided they adhere to local tax and licensing regulations. However, authorities have repeatedly linked them to money laundering and other criminal activities.
In December last year The United States Government Accountability Office released a report detailing the role Bitcoin ATMs may play in human and drug trafficking.
The report argued that Bitcoin ATM providers are not required to routinely report the locations of their kiosks. This is a potential blind spot for federal agencies looking to identify kiosks in areas that are at high risk of financial crimes and human and drug trafficking.
The report adds that the appeal of exploiting Bitcoin ATMs for criminal purposes is heightened when ATM providers opt out of collecting users’ identity information
The report also cites the FBI, which said there has been "an increase in the use of virtual currency kiosks for illicit purposes," including human and drug trafficking.
In March, the UK’s Financial Conduct Authority ordered all Bitcoin ATMs in the country to shut down. The FCA stated: “None of the crypto asset firms registered with us have been approved to offer crypto ATM services, meaning that any of them operating in the UK are doing so illegally and consumers should not be using them.”