The Bitcoin ATM Black Market: Regulatory Blind Spot Allows Crypto Traders To Subvert KYC Requirements

Buying and selling Bitcoin in America's capital city just became even easier with the recent rollout of 20 Bitcoin ATMs across Washington DC. The launch of the machines follows a global surge of installations in which 9 new Bitcoin ATMs come online every day.

Coinsource, a Texas-based Bitcoin ATM provider, has announced it will be installing its machines across the district of Columbia and Maryland.

Local acceptance of Bitcoin has been strong but woefully underrepresented by ATM providers, with only 5 ATMs being made available to DC residents.

The recent influx of Bitcoin ATMs in American cities mirrors a worldwide trend as numbers provided by Statista have shown numbers of the machines has doubled for two years straight, from 502 in January 2016 to 2050 in January 2018.

Due to the ongoing struggle for acceptance by the traditional banking sector, 66% of Crypto ATMs provide only provide one-way transactions, allowing customers to deposit fiat and withdraw Crypto.

Service providers who installed Crypto ATMs prior to widespread KYC adoption allow their users to operate machines without the need for formal identification.

Similar loopholes exist worldwide, the Canadian Instacoin and Australian Bitrocket both provide customers with two way Bitcoin transactions without any need for supporting identification and neglect the required hardware to support KYC in the future.

While these providers have stayed under the radar, large-scale rollouts such as Stargroup's plan provide Australians with 2,900 ATMs could see regulatory bodies outline their stance on the matter, forcing providers to recall non-compliant machines.

According to CoinATMRadar, half of all Bitcoin ATMs provide altcoin support in addition to their ability to transact on the BTC blockchain.

While this currently dominated by cryptocurrencies that provide direct payment assets such as Litecoin, Ether and Bitcoin Cash, future versions of automated tellers may provide support for other blockchains, acting as access points for digital assets such as DentaCoin to purchase mobile data, or Power Ledger, which allows customers to trade renewable energy in a peer to peer marketplace.