June 29, 2021
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Bitcoin ATMs Require Complex Procedure

Canada was the first pioneer country, which the very first Bitcoin(BTC) ATM started to work in this country in 2013. After that, the United States followed Canada and many Bitcoin ATM started to work there. Statistics show that around 81% of Global ATMS concentrated in North America. In fact, there are more than 8000 Bitcoin ATMs in over 70 countries worldwide.

There are two different types of Bitcoin ATMs. The basic one simply provides services to user in order to only buy Bitcoin. The other, which is more complex makes users be able to buy and sell Bitcoin. Although there are many cryptos and Bitcoin exchanges out there, Bitcoin ATMs are getting popular day by day. In fact, many people prefer to use ATMs rather than exchanges.

Perhaps it’s your question too, that how can ATM operators buy a machine and set it up? What are the requirements in order to have a Bitcoin ATM business?

For this purpose, the compliance is the key. In fact, operators need to fulfill KYC and AML regulations as well as the state or federal laws and regulations.

Bitcoin ATMs; the first step is to register with FinCEN

Bitcoin ATMs considered as Money Services Businesses in U.S. As a result, all Bitcoin ATMs operators must register as an MSB with FinCEN. In fact, FinCEN is the U.S. financial intelligence unit and mediator of federal AML laws.

The registration has a simple process and everyone can do it easily. By registering with FinCEN you are officially agreeing to be regulated under predetermined laws. These laws consist of AML program as well as promise to report any suspicious activity. In addition, you need to fulfill the state-level regulations as well.

Once registered with FinCEN, operators must implement and establish an anti-money laundering compliance program. The AML program must address the pillars as below:

Engagement of a compliance officer

The officer is responsible for checking all the data day-to day in order to make sure that AML and BSN programs fulfilled. In addition, the officer is responsible for the risk evaluation of each ATM.

Bitcoin ATMs; Anti-Money-Laundering training

The operator has to train all staffs in related to the classic techniques which use for money laundering, general Bitcoin ATM risks, and any other problems or issues, which compliance team may face with.

The customer spot check

Operators are responsible in order to check the customers’ identification. FinCEN identifies various elements for this step. The operator must train all the employees to verify information, spot beneficial of a legal entity customer and report any related suspicious activity.

Internal controls

The internal control executed to lower the risks. For this purpose, the operator must develop appropriate policies, processes and procedures specific to his/her business, which meet all BSA requirements. This process consists of upgrading the system with the new rules and regulations as well as how to identify, report and address suspicious activities.

Independent AML review

The operator must manage an AML report and review once per year.

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