Bitcoin ATMs being used for drug-money laundering in Spain, as dealers exploit loophole in existing EU law

Spanish police believe bitcoin ATMs are being widely used for illicit drug payments, Bloomberg writes. The authorities have now highlighted a gap in anti-money laundering controls within the European Union (EU) which do not cover cryptocurrency ATMs, meaning users at Spain's 89 bitcoin cash machines do not need to be properly identified.


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In April 2018, police in Spain shut down a drug operation for which bitcoin ATMs were "crucial." It arrested 11 people who reportedly transferred more than 8 million euro ($9 million) in bitcoin to drug traffickers in Colombia and other countries, purchasing the cryptocurrency in cash from the ATMs. The group allegedly set up two bitcoin cash machines and set them up in their Madrid office. They claimed to be running a remittance and cryptocurrency trading centre, meaning large money transfers used to top up the machines with bitcoin went unnoticed.

While cryptocurrency exchanges and custodians will be monitored by new EU regulation coming into force next year, these do not extend to cryptocurrency ATMs. Authorities fear this will allow sophisticated dealers to continue exploiting bitcoin ATM and to slip under the radar.

About Author

Isabel is The Block's London and European reporter. She previously reported for Reuters in Madrid and London, following on from her time as a freelance journalist for the Guardian and the New York Times. She has a Bachelors in War Studies from King’s College London and a Master of Philosophy from the University of Oxford. Conflict of Interest: Edward Woodford, the CEO of SeedCX, is Isabel's brother. She does not report on any issues related to Seed or advise other authors in any regard.