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Bitcoin ATM

Bitcoin ATM ‘Loopholes’ Exploited in Hong Kong, Trio arrested

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Automated Teller Machines [ATMs] has acted as the backbone of the retail payments landscape for over fifty years. Acting as a physical access point, ATMs have now made its way to the digital age money space we now know it as the cryptocurrency industry. Over the years, Bitcoin ATMs have sprung up at a highly impressive rate. And with it, the crimes.

In the latest development, the Hong Kong authorities reportedly arrested three persons linked with the alleged siphoning off $226,000 in Hong Kong dollars from six Bitcoin ATMs in 11 transactions. The police suspected that the arrested individuals are the”core members” of a “larger syndicate”.

According to the South China Morning Post report, the three males arrested were between 26 and 55 years of age. The two platforms reportedly suspected foul play and exploitation of “loopholes” in the Bitcoin ATMs after noticing cash withdrawals. The authorities were able to arrest the trio two days after cryptocurrency exchanges had filed a report.This development was first of its kind in the Mong Kok region

Following the arrest, the Superintendent of Hong Kong’s Cyber Security and Technology Crime Bureau [CSTCB], Wilson Tam reportedly stated,

“I cannot reveal what the loopholes are. But any bitcoin transaction needs verification. Maybe the ring bypassed the verifying process before taking the money.”

Tam further revealed to have offered to the two cryptocurrency companies to upgrade their systems.

Consistent growth of Bitcoin ATMs

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According to the Bitcoin ATM tracking website Coin ATM Radar, there were a total of 9,106 Bitcoin ATMs in the world while 52 of them are in Hong Kong. Interestingly, since the start of the year, Bitcoin ATM installations have doubled.

Increasing criminal activities tied to Bitcoin ATMs

While the expansion of the Bitcoin ATM marketplace has been nothing short of remarkable, it is the soaring criminal activity leveraging this space that has become a cause of concern.

Across the Pacific, Bitcoin ATMs in the US sent more funds to high-risk cryptocurrency exchanges than low-risk exchanges in 2019. This was found by a recent report by Cipher Trace, the percentage of funds from the US-based Bitcoin ATMs sent to this category of exchanges had grown exponentially.

According to the crypto-analytic firm, high-risk exchanges are classified as those which have a record of nefarious activities known for facilitating criminal activities and money laundering. And it was also found that as high as 8% of the US Bitcoin ATM payments are sent directly to high-risk exchanges.

Dismantle of Bitcoin ATM operation 

In another development, the U.S. Department of Justice [DOJ] last month revealed to have taken down a Bitcoin ATM operation worth $25 million. It also reportedly seized 17 machines along with some cryptocurrencies from a man who was not licensed for Bitcoin ATM operations.

The perpetrator, Kais Mohammad, further admitted laundering of millions of dollars of Bitcoins as well as cash

State-Owned Bank Launches 5,000 Blockchain-based Touchless ATMs to Curb COVID-19 Spread in Russia

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Russian state-owned bank, Sberbank is expanding the use of touchless blockchain-based ATMs in the country. The ATM machines use blockchain technology for security measures and the touchless functionality aims to curb the spread of highly communicable coronavirus pandemic in Russia.

The COVID-19 pandemic seems to be paving the way to a contact-free future lifestyle. From touchless payments, touchless travel, touchless toilet, and the latest, touchless ATMs. Touchless interactive technology has been slowly gaining grip, but the pandemic seems to be accelerating their adoption.

Contact-free ATMs adoption driven by Russian state-owned bank

Sberbank paid a hefty $108.5 million to purchase the blockchain-based contact-free ATMs in its efforts to curb the spread of coronavirus in the country. Interestingly, the ATM machines can be linked with popular mobile payment platforms such as;  Apple Pay, Google Pay, Samsung Pay, Huawei Pay, and the Russian Central Bank’s  Mir Pay.

Moreover, the touchless blockchain-based ATMs can be operated through the user’s mobile device, instead of manually operating the machine which poses a serious health risk in today’s world. Each ATM machine has the capacity to hold up to 14,500 treasury notes. They are equipped with a pattern recognition system and blockchain applications to ensure maximum security.

Although Sberbank is a big advocate of blockchain, it is not yet clear how the new ATMs’ use the technology. Back in 2018, Sberbank established a blockchain lab for innovation and tests the application of the technology in various operations. For example, Sberbank became the first Russian financial institution; to apply for a patent for a system that converts Repo to smart contracts.

Russia looking to criminalize cryptocurrencies 

Given that Sberbank is a state-owned bank, it shows that the Russian government wants to stay up to date with the latest technology and trends such as blockchain. In contrast, Russia seems not happy with the use of digital currencies such as Bitcoin in the country. 

According to a report by a local news agency, RBK, the Russian crypto bill which has been stalling for more than two years, might go through some modification to ban the use and issuance of digital currencies within Russia’s borders. The draft bill proposes a fine of up to $7,000 and a jail term of up to seven years.

Irish Crypto Firms Denied Banking Services due to State Delays

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According to a report by Irish Times, Irish crypto firms claim they are being denied banking services as a result of a new European directive yet to be implemented by the state. It’s been two years now since Irish firms that offer cryptocurrency services started complaining about having to open foreign bank accounts since they cannot do so in Ireland.

Irish laws don’t recognize cryptocurrency as a currency

Just the other day, Boinnex, a Bitcoin ATM machines provider which is headquartered in Cork city, saw its bank account with AIB shut down. The Irish crypto firm was notified via a letter back in October last year that the bank wants to end its relationship with the firm since digital currencies are not regulated in the country.

Indeed, Irish law does not regard digital currencies as a currency. In its defence, AIB Bank mentioned the delay in transposing the AMLD5 into law, which should have happened by the end of January.  Furthermore, the aforementioned delay was caused by the country’s general elections which took place early in February; and the ensuing negligence by political parties to determine a new administration.

Irish crypto firms forced to seek solace abroad

According to the financial services provider, entering into a business relationship with crypto-related firms is far from the bank’s risk appetite. As per the founder of Boinnex, Bryan Tierney:

“We’ve been forced to get a banking partner abroad. A lot of companies in the space are in a similar situation. Some of these foreign banks charge exorbitant fees as they know they’re the only show in town.” 

As per Mr.Tierney, the denial by the banking sector to serve Irish crypto firms has forced his; and several other firms facing the same challenge to open bank accounts in foreign countries. However, most of the foreign banks charge inflated fees, since they are aware of the monopoly advantage.

Bitcoin ATMs Surge In January As Bull Market Sheds Positive Light

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The concept of cryptocurrency adoption has been appealing to the community for a long time now. This feeling has also been propelled by the developments and updates in the industry.

Statistics have now shown that the adoption of Bitcoin has been on the rise due to a number of its peripherals gaining significant traction across the globe. Bitcoin ATMs have become all rage, and global numbers have started to grow.

According to sources, new Bitcoin ATMs were being set up in cities across several regions. Many of these were for convenience but some have also felt the need to showcase how user-friendly and efficient a Bitcoin ATM is.

More than 400 Bitcoin ATMs were set up all over the world in January 2020. This influx in interest, as well as the capital, was the main reason why the total number of Bitcoin ATMs was closing in on 7000.

The increase in the number of Bitcoin ATMs comes at a time when the price, as well as the market cap of the coin, has gone up since 2019. Bitcoin and its compatriots have had a great start to 2020 and the increased ATMs was an effect of that phenomenon. There were some period highs in the middle of 2019 but that had waned once the bear market started towards the fag end of the year.

Statistics showed that at the start of this year there were only 6377 ATMs present around the world. In a month’s time, the number of new machines set up jumped to 432 while the number of ATMs closed was 104. These numbers showed a 5.1 percent increase in  Bitcoin ATM space.

Since Bitcoin’s inception, the community around the cryptocurrency has grown by leaps and bounds. That has been evident in the number of companies foraying into the Bitcoin ATM space. Genesis Coin has the most number of ATMs with 16, followed by General Bytes with 62 machines. Several companies such as Coinflip Bitcoin ATMs and Bitcoin Depot that made news for installing completely new machines.

The United States has naturally taken the lead in the Bitcoin ATM sphere as the region was targeted by several fintech companies. In January, 325 new ATMs were installed in the US while five were added in Canada. The United Kingdom came in third place with two new ATMs in January. At the same time, some countries also saw a loss in the number of machines.

Austria reported that three ATMs were decommissioned in the country while the Netherlands shut down two locations. Other than Bitcoin, these machines also support cryptos such as Bitcoin Cash and even Dogecoin. BCH has become an ATM friendly crypto after the number of BCH supported ATMs increased by 4 percent in the last month.