GAO Report Suggests Tightening Regulations on Crypto ATMs 

As regulators worldwide consider ways to police cryptocurrency, the U.S. reports use of crypto payments to enable illegal human and drug trafficking is on the rise.

In its 80-page report “Virtual Currencies: Additional Information Could Improve Federal Agency Efforts to Counter Human and Drug Trafficking,” the Government Accountability Office (GAO), said crypto ATMs were partly responsible for the surge because the machines have fewer rules than crypto exchanges and transactions are more difficult to trace.

“As [crypto] market usage expands, FBI officials said they expect to see an increase in the use of virtual currency kiosks for illicit purposes, including for human and drug trafficking,” said the GAO, the agency that provides auditing, evaluation, and investigative services for the Congress.

Researchers analyzed the use of cryptocurrencies in global trafficking and how agencies such as the Internal Revenue Service, the Immigration and Customs Enforcement and U.S. Postal Service are fighting the rise in crypto-facilitated crime.

The agency recommended the IRS and the Financial Crimes Enforcement Network (FinCEN) within U.S. Treasury Department should collaborate and better regulate the kiosks.

While kiosk operators must register with FinCEN, they do not have to regularly update any law enforcement agency about the location of their kiosks, the report said. A strengthening of crypto kiosk rules would allow law enforcement to obtain better information and improve its ability to identify potentially illicit transactions, the GAO wrote.

Last week, PYMNTS reported the global adoption of cryptocurrency broke transaction volume records last year. But the 567% surge attracted cybercriminals, who turned to the blockchain for scamming and thievery, according to preliminary data from blockchain analytics firm Chainalysis.

Cryptocurrency is full-on mainstream, with transaction volume hitting an estimated $15.8 trillion in 2021. But that widespread adoption has attracted a record number of crypto-related crimes, up 79% to reach $14 billion, the New York-based researcher found.

Learn more: Crypto Crime Up 79% Against Transaction Volume Surge of 567%