(BlockBar) Prompting a proposed city-wide ban by the mayor, and potential federal legislation the Vancouver Police Department seconds that Bitcoin ATMs have become “an ideal money-laundering vehicles.” Past year, around 76 machines have come under police fire due to perceived regulatory issues. Most recently in February 2019, Sergeant Alvin Shum pointed at Bitcoin ATMs along with the ideological underpinnings of blockchain generally.
Shum said in a report which he wrote to the Vancouver Police Board, “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.”
According to Shum, this lack of regulation will increase the breeding of organized and petty crime. He also points to the rising trend of cryptocurrency police filings in Vancouver year over year. It is worth paying attention that the filling has increased 350% from 2016 to 2017, and then saw a further 250% increase in 2018. Shum spoke of a “high-pressure” tactic employed by fraudsters to direct victims to withdraw large amounts of cash and deposit it in a Bitcoin ATM to a predefined Bitcoin address. To be noted, these scams target the most vulnerable segments of the population including recent immigrants and the elderly.
The first bitcoin ATM ever installed at a Vancouver coffee shop was in 2013. It had contained a built-in palm scanner which was designed to prevent users from processing more than $3000 CAD per day. Right now, Vancouver lacks standardization for the types of transactions that can be performed on these ATMs. These standards are different for different areas or machines eg. some machines require a cellphone number and text verification for transactions over $1,000, while for others push the limit to $3,000. A few machines advertise no limits at all. A decision regarding the regulation, monitoring, or ban of crypto ATMs is currently being researched by city staff who will report back in the fourth quarter of 2019, Alvin Singh, the mayor’s director of communications.