Bitcoin

Vancouver Bitcoin ATMs are About to Go Extinct

In a recent turn of events, the Mayor of Vancouver issued an order to ban all the bitcoin ATMs working in the city. The order came after the local police department issued a statement calling these ATMs as “ideal money laundering vehicle”.

There are more than 75 of such machines operating in the city. The Vancouver police have been speaking against these ATMs for a long time now, due to the apparent regulatory issue that these services have. There have been two high profile public callouts for these ATMs by the police in the past year alone. Quite recently, in a Vancouver Police report, a senior police official Sergeant Alvin Shum wrote:

Given the lack of a central authority, there is no controlling organization who can monitor or regulate the transfer of funds to ensure a legitimate transaction. This creates a prime opportunity for the criminal element to capitalize on remaining anonymous, as they work to defraud unsuspecting citizens, launder money, and make large-sum anonymous transactions

The lack of regulation has been a cause of concern for the police department, and the report suggests that laws be enacted as these regulations will help in curbing a few of the crimes in the city. Ever since 2013, the year when the city first installed crypto ATMs, the crime rate has increased.

Between 2016 to 2017, the crime rate in Vancouver has jumped a whopping 350%, while another jump of 250% was recorded in 2018. The Metro Police also expects that it will receive around 840 complaints regarding crimes this year, some 300 more than the previous year.

READ ALSO: An Entrepreneur’s Journey From Selling Smoothies for Bitcoin to Bitcoin ATMs

It is unclear how many of these crimes involved these ATMs or even cryptocurrencies in general; however, it is safe to assume that even though the number may be minute, it is still there. The report by the sergeant addresses the issue, saying that most of the fraudsters use the information to debit a large amount of cash on these bitcoin ATMs and send it to anonymous bitcoin addresses thus effectively laundering money gained through illegal means.

After the release of the report by Sergeant Shun, almost 15 new such ATMs have been installed in the city. However, the city council is preparing for new regulations. In January, a suggested bylaw by the city council said:

Regulate the use and operation of cryptocurrency ATMs, including the requirement for a business license, requirement for signage to advertise common frauds, the requirement for identifications to be used to verify the sender and receiver of funds and requirement of security features.

At the end of May, the Mayor called for an outright ban of these ATMs from the city of Vancouver; however, he did not convince all of the council. There are a few people who debate about the utility of the service for the people of Vancouver. They are rallying around transaction limits for the ATMs — they don’t want people with actual limits on their bank accounts to lose the service. The machines are a utility for the people and should not be taken away from them.

Some people think that the city government should reenact the previous policy that was initially implemented in 2013 and says that the ATMs should have a $3,000 Canadian limit on them. A transaction with more volume than these shouldn’t be processed. These limits should be made a standard as different ATMs advertise different limits, from $1000 to no limit at all.

READ ALSO: 6 Factors Why Bitcoin is NOT Ready for Mainstream Adoption

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Shahzaib Zafar

Electrical Engineer, Crypto enthusiast, a tech nerd and a developer with a keen interest in blockchain, writes daily articles about bitcoin and cryptocurrencies for blockpublisher.

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