Drug dealers and gangsters are pumping their profits into bitcoin cash machines across Britain to launder the dirty money, police have warned.
Detectives say they have seen an explosion in the use of digital currency by criminals who are strolling into cafes, newsagents and corner shops to dump their ill-gotten gains in virtual currency ATMs.
The cash machines, found in 93 locations in London and other cities, allow anyone to deposit sterling in exchange for bitcoin and other ‘crypto currencies’, which are held electronically and only exist in cyberspace.
The funds can then be transferred across borders to criminal associates who can withdraw them in any currency or spend them on the dark web, without being traced.
Bitcoin has shot up by 1,000 per cent alone this year and the move to stash profits online could even make more money for web savvy criminals
Police have described crypto currencies as one of the biggest emerging threats in organised crime because gangs have realised that the cash machines offer the perfect opportunity to offload large quantities of cash.
Traditionally, casinos and bookmakers have been used to launder crime proceeds, but detectives believe that crypto currency ATMs will soon overtake them.
A bitcoin ATM, pictured, in Shoreditch, London. The cash machines allow anyone to deposit sterling in exchange for bitcoin and other ‘crypto currencies’
All online currencies are highly encrypted and some are marketed specifically for the ‘privacy conscious’.
Criminals are using pay-as-you-go mobile phones, bought with cash and soon thrown away, to set up bitcoin accounts so these ‘online wallets’ cannot be traced back to them.
There is also no paperwork trail for police to follow because there are no bank statements or bitcoin certificates.
Criminals can put bank notes directly into a bitcoin ATM and turn them into bitcoin currency, without the notes being checked by a bank clerk or bank cash machine.
With the value of bitcoin shooting up by 1,000 per cent alone this year, the move to stash their profits online could even make more money for web savvy criminals.
Detective Chief Superintendent Michael Gallagher, who leads the Metropolitan Police’s Organised Crime Command, said: ‘Drug dealers know how to use this.
‘Officers from Trident [the Met’s gang crime command] are finding that street dealers are loading up local ATMs and standing on street corners cashless, which decreases the risk for them. If you move large quantities of cash it lowers your vulnerability to other criminals.’
Drug dealers are now straying outside their traditional patch and instead basing their activities near a bitcoin ATM where they deposit up to £1,500 a day.
He said the number of bitcoin ATMs was growing because shopkeepers get around £1,200 a month to have the machines, which resemble ordinary ATMs, in their stores.
There are 76 bitcoin ATMs in London alone, and they are also available in cities including Brighton, Birmingham, Bristol, Cardiff, Portsmouth, Coventry, Leicester, Derby and Manchester.
Many of them are hidden away at the back of corner shops and newsagents, but they are also popping up in hairdressers, mini-cab offices and restaurants.