Shortly after the Federal Trade Commission’s (FTC) warning to Americans concerning crypto ATM scams, the outlets come under scrutiny by authorities after yearly security reports suggest a connection between illegal trafficking and crypto ATM’s in the country.
This development came after the Government Accountability Office (GAO) of the United States has released a report that conclusively Dee correlation between trafficking cases and the utility of cryptocurrency as a facilitator for such cases year long.
The analysis fielded by the group that offers its accounting and investigative services to the US Congress has suggested that the resultant increase in the nation’s drug and human trafficking cases can be traced to the unregulated diffusion of Crypto ATMs in the country, advising that registration standards be put down and effectively tightened to field accountable and strict outlets and kiosks.
The report released on January 10 stated that as the crypto market continues to rear its relevance and fields increasing utility, FBI officials revealed that they expect to experience a surge in the use of the digital assets class outlets for illegal purposes, not excluding human, drug and money trafficking.
The revelations and announcements come after US’ FTC warned Americans about the usage of the crypto ATMs by fraudsters to exploit unsuspecting victims, by impersonating government officials, law enforcement and usage of similar elaborate schemes.
Crypto ATMs Set To Become A Menace If Left Unregulated
Referencing GAO’s report, which investigated the utility of the digital assets in global trafficking rings and setups, the usage of ATMs are becoming mainstream due to their slack regulations compared to cryptocurrency trading platforms. According to the investigation report, if left unchecked globally, this development could become a menace in society due to the ease it affords nefarious individuals and entities to perpetrate criminal activities.
Since transactions undertaken to leverage crypto ATMs are marginally difficult to effectively monitor, track and identify, more and more unsavoury acts are being facilitated using the outlets globally. Should the situation of things remain the same and unchanged, criminals might become unbridled in their actions due to the protection the framework affords them. It will become harder to curb and effectively eradicate in the long run.
The agency’s investigation discovered that over 50% of the marked online sex markets that is a possible front for sex trafficking allow crypto payments; it was also discovered that over 36% of all investigations done by US Immigration and Customs Enforcement involving cryptocurrency were related to drug trafficking. 25% of all IRS investigations and over 85% of Us Postal Service investigations related to crypto were also drug-related.
Crypto ATMs Relaxed Regulations A Constraint For Law Enforcement
According to the agency, the lack of relevant and helpful information concerning the machines and activities leveraged on then impedes law enforcement’s ability to identify and efficiently apprehend criminals. A case study is a scenario in which crypto ATM owners must register their outlets with the Financial Crimes Enforcement Network (FinCEN). No legislation requires the owners to register the physical location of the outlets.
According to GAO, this kind of legislation effectively cripples the local and federal agencies’ ability to identify and mark outlets in regions previously identified as hotspots for financial-related criminal activities.
Strict Regulations Will Do The Trick
The agency strongly believes that the imposition of ironclad and stricter regulations on crypto ATMs will facilitate easier enforcement and allow access to outlets nationwide. The access to ATM locations in the country will help narrow down search radii in criminal investigation and aid the identification of potentially illegal transactions.
The report urged Congress to mandate the FinCEN and the Internal Revenue Service (IRS) to collaborate to revamp and revise registration standards and rules for cryptocurrency ATMs.
