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Bitcoin ATMs

As cryptocurrency becomes more popular, online bitcoin brokerages and exchanges have certainly gotten more stringent as it relates to regulatory compliance. While it used to be possible to purchase bitcoin while providing few personal details, a know-your-customer (KYC) check has become an industry standard for these companies.

But bitcoin is still an open platform, and the protocol makes no distinction between users. On the bitcoin blockchain, an address is an address, regardless of who owns it and how they intend to use any bitcoins they might possess.

Bitcoin ATMs, which operate like traditional cash dispensers, may play a role in keeping bitcoin the quick and accessible payment method as it was originally touted.

At one bar and restaurant in the US, owners told a story about how a customer knocked on the door of the establishment after hours asking servers to use the bitcoin ATM. When the servers said that the ATM shuts down when the restaurant does, the customer told them he’d give them $100 if he could still use the machine.

The situation highlights one of the reasonable grounds to suspect a money laundering or terrorist financing offense, according to the Financial Crimes Enforcement Network’s Suspicious Activity Reports (SARs). Offenses like these are a red flag and must be reported.

Stories like this seem more commonplace than acknowledged.

In Atlanta last year, a Lamassu Bitcoin ATM was stolen by two culprits brandishing a handgun from a smoke shop. While it’s unclear how much the robbers knew about bitcoin, there was speculation that they thought bitcoin could be extracted from the machine or that large sums of cash were inside, which is not always the case.

Whatever they were looking to achieve, it’s safe to say that they most likely weren’t looking to purchase bitcoin to investigate how it could cut costs in the back-end of their business.

Out of this association with crime has come the “blockchain without bitcoin” movement that has found regulated, risk-averse financial institutions and enterprises opting to build their own blockchain protocol without the bitcoin currency riding on top.

But whether or not bitcoin is used for the gray areas of commerce, it still stands as the only blockchain project that is currently in the wild and innovating on the clunky traditional payments process.

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