Bitcoin ATMs Expose Loopholes in EU’s Anti-Money Laundering Laws, Claims Spanish Police


In an effort by Spanish law enforcement agencies to nail a criminal gang that has been utilizing Bitcoin ATMs to send about $10 million to drug dealers in Colombia and other nations, has exposed the glaring loopholes that exist in the EU's anti-money laundering laws.

Bloomberg says that the rules and regulations designed to deal with money laundering in Europe do not include cash machines’ owners or to cryptocurrency trading platforms. This means that users at Spain's 89 Bitcoin cash machines do not need to be properly identified to make transactions.

Citing an anonymous official from Guard Civil (a law enforcement agency in Spain), Bloomberg alleges that the criminal gang was able to hire two Bitcoin ATMs from trading platforms and installed them in an office complex in Madrid. claimed to be running a remittance and cryptocurrency trading centre, meaning large money transfers used to top up the machines with bitcoin went unnoticed.

The police claims that the two ATMs were crucial in transferring about $10 million to the drug kingpins in Colombia. The police also confiscated the two Bitcoin virtual machines, four cold wallets as well as 20 online wallets.

Prosecution Becoming Difficult

According to the anonymous police official, prosecuting the case is driving them to uncharted waters and is becoming difficult. The police are trying to prove the linkage between the two virtual machines and the digital assets seized and the task has been complicated by lack of clear guidelines or policy in regard to Bitcoin’s legal status in Spain.

However, over the last one week, the Supreme Court in Spain gave its first crypto-related case. The ruling indicated that Bitcoin is not a legal electronic money but is an asset. The police in the country welcomed the ruling saying that it was a starting point on definition of Bitcoin.

Although the number of Bitcoin ATMs have soared across the world, they have also faced numerous challenges from authorities. For instance, the city of Vancouver, Canada is contemplating banning Bitcoin ATMs due to high cases of money laundering in the city. Similarly, police in Australia have issued strong warnings to citizens that Bitcoin ATMs are a source of fraud cases in the country. India has banned any installation of the virtual machines in the country and even arrested individuals who attempted to introduce the virtual machines in the country.

On the positive note, Cointelegraph reports that Canadian exchange Coinsquare has invented a software which will enable conventional ATMs to sell cryptocurrencies around the world.

The EU is set to enforce new anti-money laundering legislation next year where cryptocurrency exchanges and custodians of online wallets will be monitored by new EU regulations. However, these do not extend to cryptocurrency ATMs and authorities fear this will allow sophisticated dealers to continue exploiting Bitcoin ATM and to slip under the radar.

Should Bitcoin ATMs be included in anti-money laundering regulations to reduce fraud and laundering cases? Let us know in the comments section.

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