Vancouver Saw the First-Ever Bitcoin ATM. Now Its Mayor Wants to Ban Them

Bitcoin ATMs have become "An ideal money-laundering vehicle," according to the Vancouver Police Department, prompting a proposed city-wide ban by the mayor, and potential federal legislation, The Star reports.

Most recently in February 2019, Sergeant Alvin Shum took aim not only at Bitcoin ATMs, but also the ideological underpinnings of blockchain generally.

He points to the rising trend of cryptocurrency police filings in Vancouver year over year, which increased 350% from 2016 to 2017, and saw a further 250% increase in 2018.

It is unclear how many of these crimes were directly tied to the use of cryptocurrency ATMs, though Shum spoke of a "High-pressure" tactic employed by fraudsters to direct victims to withdraw large amounts of cash and deposit it in a Bitcoin ATM to a predefined Bitcoin address.

Since Shum wrote to the police council, 15 new machines have been added to the Vancouver metro area, according to coinatmradar.com.

In January, the city council suggested a bylaw to "Regulate the use and operation of cryptocurrency ATMs, including the requirement for a business licence, requirement for signage to advertise common frauds, requirement for identifications to be used to verify the sender and receiver of funds and requirement of security features."

Four months later, at a May 28 council meeting, Mayor Kennedy Stewart pushed for the outright ban crypto ATMs in the city.

The third largest metropolitan area in Canada, Vancouver only hosts about 12% of the nation's total crypto ATMs. The first bitcoin ATM ever was installed at a Vancouver coffee shop in 2013, which contained a built-in palm scanner designed to prevent users from processing more than $3000 CAD per day.

Currently, Vancouver lacks standardization for the types of transactions that can be performed on its ATMs. Some machines require a cellphone number and text verification for transactions over $1,000, while for others push the limit to $3,000, according to CoinATMRadar.com.

A decision regarding the regulation, monitoring, or ban of crypto ATMs is currently being researched by city staff who will report back in the fourth quarter of 2019, Alvin Singh, the mayor's director of communications, told The Star.