By: Kieran Corcoran
Even low-level criminals are embracing cryptocurrency, police have warned.
Senior Metropolitan Police officers discussed its use at an organised crime briefing.
Bitcoin ATMs allow drug dealers to cleanly and discreetly dispose of money.
Officers are worried that cryptocurrencies will hinder the fight against crime.
Drug dealers are using cryptocurrency ATMs in London to stash the proceeds of their crimes, London's Metropolitan Police has said.
Organised crime detectives said that even small-time dealers are embracing currencies like bitcoin, litecoin and ethereum as a way of banking drug money without getting caught.
The machines, of which there around 50 in the capital, allow them to swap cash directly for cryptocurrencies without alerting law enforcement in the way a large cash deposit at a bank might.
The warning, given by officers at a briefing for reporters last week, shows that the increased public profile of cryptocurrency — particularly bitcoin — means that even relatively unsophisticated criminals are embracing it.
The Serious and Organised Crime Command (SOC) said the number of cases involving cryptocurrency has gone from "zero" at the start of 2016 to several dozen today, a number they believe will increase.
Detective Inspector Tim Court, a cryptocurrency specialist, said: "If you’re a local drug dealer [crypto ATMs] are a great opportunity to quickly dispose of cash."
There are around 100 cryptocurrency ATMs in the UK, officers said. According to the website coinradaratm.com, around half of them are in London.
Here is a photograph of one of the ATMs (police made no suggestion that any particular location or machine was involved in crime):
Detective Chief Superintendent Michael Gallagher, head of SOC, said that drug dealers were setting up shop close to the ATMs because "if you move large quantities of cash around it leaves you vulnerable to other criminals.
"It's in their own interest, in terms of protection, to use this," he said.
He said some drug dealing operations are effectively "cashless" now because of the success of the strategy.
At the same meeting, officers stressed that cryptocurrency is being used in more and more areas of crime.
Brothels were using currency exchanges to bank profits, they said, while organised gangs are spending cryptocurrency on the dark web to purchase guns.
The inherent privacy of bitcoin — which is anonymous and very difficult to trace — means that it is "open to exploitation" by criminals.
Detective Chief Inspector Gary Miles, who leads the Met's counter-fraud operation, said: "The reason for bitcoin being created was genuine, was honest.
"But it would appear to have been hijacked and exploited by some people in the criminal underworld."