Bad week for UK: ‘Crypto’ ATM crackdown, BTC sell-off

It was a rough week for all things digital money in the United Kingdom, as reports emerged that the government plans to sell off $7.2 billion (£5.33 billion) in confiscated BTC, rather than stockpiling it as some industry groups have urged. Meanwhile, the U.K.’s digital currency ATM crackdown continued, just as new online research by the U.K.’s top ATM network showed that cash is still the most trusted payment method in the country.

UK’s digital currency sell-off

On July 19, The Telegraph newspaper reported that the U.K. Chancellor, Rachel Reeves, was working with police forces to sell off a stockpile of seized digital assets worth “at least” £5 billion ($6.7 billion).

It’s estimated that the U.K. government currently holds around $7.2 billion (£5.33 billion) in confiscated BTC as a result of investigations into frauds, scams, money laundering, and other illicit finance.

The report, published Saturday, stated that the U.K. Home Office plans to develop an official digital asset storage system to handle BTC sales and other digital currencies.

This is part of a broader effort by the U.K. government, under Prime Minister Keir Starmer’s Labour Party, to fill a much-talked-about £22 billion ($29 billion) “black hole” in the U.K.’s public finances.

Selling off over £5 billion worth of BTC would undoubtedly dent this figure, but the rumored move met with a swift and negative response from key voices in the digital asset and finance space.

On Monday, trade association CryptoUK called on the government to take “a long-term view,” arguing that the plan to sell off the nation’s confiscated crypto stockpile “would run contrary” to the country’s goal of becoming a digital asset innovation hub.

“We would urge the government to take a long-term view on the holding of crypto and deeply consider what message offloading these digital assets would send to the UK’s crypto industry,” said a CryptoUK spokesperson, as reported by tech news site Decrypt on July 21.

The trade association added that “other jurisdictions now hold Bitcoin reserves and Bitcoin treasuries are increasingly popular with companies.”

This sentiment was echoed by Nigel Green, CEO of global financial advisory giant deVere Group, who pointed to the example of the United States and its recently announced Bitcoin Reserve.

“If countries like the US, the world’s largest economy, are seriously weighing Bitcoin as a reserve, why would the UK liquidate instead?” He argued. “If we advocate crypto as strategic, then hastily disposing of seized Bitcoin is hypocritical—and harmful.”

Green warned that the mooted move would echo past errors and undermine long-term strategy.

“Turning these assets into instant cash is tempting, but it risks repeating historical errors,” said Green, noting that “they sold gold in a dip, only to regret it years later. We risk replaying that error with Bitcoin.”

He emphasized that “emergency fiscal relief is not always best served by fire-sale tactics.”

Green reiterated that “fiscal pressure shouldn’t drive poor asset decisions,” and suggested that, far from being a gamble, BTC could act like digital gold: “It’s scarce, decentralised, and a hedge against inflation.”

At the same time as Chancellor Reeves was reportedly discussing with the U.K. police selling the government’s substantial holdings of confiscated BTC, the latter was continuing its crackdown on rogue crypto ATMs.

Digital currency ATMs under fire again

According to a July 17 statement from the Financial Conduct Authority (FCA)—the U.K.’s top finance sector watchdog—two individuals were arrested, and seven digital currency ATMs found and seized, as part of an operation led by the FCA and the Metropolitan Police Service targeting four premises across southwest London.

Since January 10, 2021, businesses providing certain digital asset services in the U.K. must be registered with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs). Therefore, operating a cryptoasset exchange or a digital currency ATM in the U.K. is illegal without FCA registration. By July 2023, the FCA had announced the shutdown of 26 machines operating unlawfully nationwide.

Despite these closures, operating a digital currency ATM in the U.K. is technically still legal, as long as the operator registers with the FCA. However, the FCA has yet to approve a single registration for a digital currency ATM, amounting to an effective ban, in all but name.

“There are currently no legally-operated crypto ATMs in the UK, so using one only supports crime,” said the FCA. “If you’re operating a crypto ATM or exchange illegally, then you should expect serious consequences.”

This attitude is not unique to the U.K., as recent months have seen an increasing global crackdown on digital currency ATMs.

In the U.S., in February, Senator Dick Durbin (D-IL), Ranking Member of the Senate Judiciary Committee, introduced the Crypto ATM Fraud Prevention Act. It would, amongst other measures, prevent new users from spending more than $2,000 daily or $10,000 over a 14-day period at digital currency ATMs, and require live, verbal confirmation for any transaction greater than $500.

In April, Australia followed suit by putting digital currency ATM operators on notice over a lack of AML/CFT checks; and most recently, earlier in July, New Zealand outright banned digital currency ATMs.

These crackdowns demonstrate a concern amongst lawmakers and regulators that the digital currency ATM sector is a particular hotbed of illicit finance, fraud, and scams—a feeling that the U.K. general public may well share.

Just as the FCA continues to enthusiastically enforce its de facto ban on digital currency ATMs, the U.K.’s main ATM and interbank network published new research showing that cash is still the most trusted payment method in the country.

UK still values cash despite growth in digital payments

This week, Link, the U.K.’s leading cash access and ATM network, published the results of research into current customer payment and spending habits.

It found that “while contactless card payments are seen as the most convenient and quickest form of payment by a significant majority of consumers, cash is seen as the most reassuring for staying within a budget and fully understanding the cost of shopping too.”

According to the research, almost two-thirds of consumers (65%) said cash protects them from fraud, compared to (22%) contactless card and (18%) digital wallets.

While contactless, via card, remained “the most preferred payment method for consumers,” with 40% choosing this option, this number was slightly down on previous LINK research. The publication suggested this “may reflect the growing popularity of digital wallets such as Apple Pay or Google, which increased over the same period.”

In a seeming blow to the digital payments and digital money sectors, the data revealed that 63% of respondents said they were unlikely to go completely cashless in the next 12 months, with only 8% being entirely cashless today, up from 6% in late 2024.

The research also saw 85% of respondents highlight the risk of a cashless society and its effect on people who cannot use digital payments yet.

“Cash remains a critical part of the UK’s payment landscape,” said Graham Mott, LINK director of strategy. “This research shows that, while digital payments are growing, cash continues to play a vital role in financial inclusion, budgeting, and consumer choice.”

Digital assets were not specifically mentioned as a part of the survey, but the findings that cash remains more trusted than digital payments almost certainly imply that digital assets have a long way to go—in the U.K. at least—before they will be considered a secure and trusted form of payment akin to fiat currency.

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