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Vancouver to Crack Down on Bitcoin ATMs Due to Money Laundering Concerns

In 2013, Vancouver, Canada made crypto history when local cafe chain Waves Coffee installed the world’s first Bitcoin automated teller (BATM). This small event, which was then a revolution, made headlines locally and abroad, giving consumers a way to enter the Bitcoin ecosystem with a $20 bill and a mobile wallet.

And since that fateful day, the BATM craze has spread throughout the city, spurred by local pioneers looking to catalyze the adoption of digital assets and related technologies. Vancouver’s love for BATMs may soon end, however, with the local government looking to crack down on these machines.

Cryptocurrency Adoption ATMs

Bitcoin ATMs May Soon Be Banned From Vancouver

According to a report from The Star, in a city council meeting earlier this year, city regulators passed a motion that would “regulate the use and operation of cryptocurrency ATMs, including the requirement for a business licence, requirement for signage to advertise common frauds, requirement for identifications to be used to verify the sender and receiver of funds and requirement of security features.”

While this motion seemingly didn’t go anywhere and didn’t garner traction publicly, Vancouver’s mayor, Kennedy Stewart, recently sparked debate on the subject matter. As revealed by the minutes of a meeting on May 28th, Stewart recently suggested a fully-fledged ban on these machines. Christine Duhaime, a Vancouver lawyer that has been instrumental in discussions regarding the QuadrigaCX debacle, spoke with The Star on the matter.

“Vancouver definitely has connections to, unfortunately, digital currencies being used for nefarious purposes… But on the other side, it also (includes) legitimate businesses where they’re trying to get regulations to operate more legitimately.”

Although Duhaime acknowledges that there is a valid need for Bitcoin ATMs, the Vancouver Police Department is skeptical. This year, they called this form of cash-to-crypto (and vice-versa) exchange “an ideal money-laundering vehicle” and a medium for “fraud”.

In fact, the department’s Alvin Shum wrote in February of this year that in 2019, they expect to receive over 840 reports related to digital assets. Shum did not elaborate on the details of the reports, but they likely have much to do with purported criminal activity.

Such a ban, if put in place, would put over 60 BATMs out of business and their operators. In fact, there are a number of Bitcoin vending machine firms based in Vancouver, some of which are acting well within the law.

Vancouver’s council seems to be entirely for taking such action, however. Studies have suggested that billions are laundered through Vancouver each year, especially through the local real estate market, casinos, and luxury goods.

In fact, a report commissioned by the province’s Ministry of Finance suggests that $7.4 billion has been laundered into Vancouver and the surrounding cities in 2018 alone. Any move to curb this rampant issue is likely a win in the local government’s eyes.

Opinion: Is This Even Logical?

As a British Columbia local that follows Bitcoin, the crypto ATM scene (I’ve made my pilgrimage to the first machine), and the Vancouver money laundering/real estate market closely, I think this move might be misguided, at least for now.

As it stands, BATMs may be the least important facet of a money launderers’ playbook. As Drew Glover of local firm BitNational explains, the average transaction at his machines is $200 — well shy of the tens of thousands required to launder millions, let alone billions.

And even if clients of ATMs want to purchase or sell a larger amount of cryptocurrency, they are mandated to input identification and their phone number, and may sometimes even be blocked entirely from making multi-thousand-dollar transactions.

Sure, there may be some bad actors that use these machines, but they are likely few and far between. Why use a medium that would elicit unwanted attention if a criminal were to, let’s say, whip out wads of bills?

If Kennedy Stewart & Co. want to amend this issue, they should first look into other supposed mediums of money laundering, like casinos, luxury goods, and real estate.

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