Bitcoin ATM

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Bitcoin ATM, Bitcoin ATM in Toronto
A two-way Bitcoin ATM in Toronto, Canada, that allows users to buy or sell bitcoins using cash

A bitcoin ATM is an electronic telecommunications device (an ATM) that allows a person to exchange bitcoins and cash without the need for a human to facilitate the transaction. Some Bitcoin ATMs offer bi-directional functionality; these machines enable both the purchase of Bitcoin as well as the redemption of Bitcoin for cash. In some cases, Bitcoin ATM providers require users to have an existing account in order to transact on the ATM.

History

On October 29, 2013, a Robocoin ATM opened in the Waves coffee shop in downtown Vancouver, Canada.[1] This machine is understood to be the world's first publicly available bitcoin ATM.

The first machine in the United States went online on February 18, 2014, in a cigar bar in Albuquerque, New Mexico.[2] However, the ATM was removed 30 days later.[3]

As of 2015 there are more than 400 bitcoin ATMs globally, mostly in North America.[4]

Regulation

There are very few laws in the world that specifically reference bitcoin or cryptocurrency, but in many countries, BTC transmission via bitcoin ATMs is regulated under existing Anti-Money Laundering (AML) laws.

United States

Federal Regulation

In the US, a bitcoin ATM business is defined as a Money Transmitter by the Financial Crimes Enforcement Network (FinCEN). As a Money Transmitter (a type of Money Services Business (MSB)), the business must comply with the rules set out by the Bank Secrecy Act (BSA). Responsibilities include establishing an AML program, appointing an AML compliance officer, and reporting suspicious activity to FinCEN. An AML program is a set of business rules that define how a business will comply with the BSA.

State Regulation

While the federal regulation targets money laundering, state laws aim to protect consumers. As of August 2014, many states have yet to issue guidance on whether or not bitcoin exchange qualifies as money transmission. Texas for example was one of the first to issue guidance in 2014.[5] In July 2014 the New York Department of Financial Services (NYDFS) released their proposal for state bitcoin regulation called "BitLicense".[6] The proposal was met with much resistance due to the scope of the regulation, widely regarded as overreaching. As of August 2014, the NYDFS has been asked[7] to extend the review period beyond the initial 45 days as well as provide the reasoning behind much of the policies proposed.

Canada

Bitcoin ATMs are not yet regulated in Canada, however regulations have been officially proposed for all bitcoin exchangers.[8] File:BitcoinATM.JPG

Criticism and controversy

  • As of Dec 2014, there are 285 bitcoin ATMs installed in the world. With the rise of these establishments, there has been a rise in bitcoin hacking concerns.
  • A New Zealand bitcoin ATM operator has announced they’re shutting down operations due to interference with banks.[9]
  • A former Robocoin operator in the UK has 'hacked' its bitcoin ATMs to run on software from rival manufacturer Lamassu.[10]

See also

References