How Safe is Bitcoin Really?

Bitcoin is a revolutionary new technology. The digital currency has become highly popular and continues to disrupt standard financial systems (to the surprise of many). While early adopters and businesses integrated digital tokens, the overall market value of Bitcoin skyrocketed by a trillion dollars. Even enterprise corporations such as Amazon, Starbucks, and Burger King accept consumer payments via cryptocurrencies. It is an exciting new financial vehicle.

But with any new technology, questions about safety and security arise. As a Bitcoin ATM operator, your customers and partners will likely have questions regarding the authenticity of the entire operation. We already pointed out just how safe a Bitcoin ATM is, but what about the underlying asset, Bitcoin itself?

Let’s look into some of the common security concerns related to digital currencies and explain what makes Bitcoin safer than some of today’s financial systems.

The Bitcoin Icon symbol, illustrated to look like a minted gold coin.

Common Security Concerns for Bitcoin

Like any financial system, asset, or technology, Bitcoin is not immune to drawbacks, errors, or weak points that fraudsters can exploit. Whilst Bitcoin is established in its security record, most cryptocurrencies are in their infancy, so while developers and community members continue to address security concerns, there are still a few key safety issues you should remain aware of:

1. Fraud

With the introduction of Bitcoin, bad actors simply moved their existing fraud strategies into crypto. Common social engineering schemes such as phishing work just as well with digital tokens, even if they are currently minimal in scope (crypto scams only account for 4.7% of the total fraud, according to the Better Business Bureau).

But fraud losses in cryptocurrency reached a massive $14 billion in 2021. Scams occur less often, but the average value is far higher with cryptocurrencies, especially non-Bitcoin cryptocurrencies (known as alt-coins). These scams only apply to protocols outside the Bitcoin network, but you should be aware of them:

  • Coin offerings: Since crypto is unregulated, anyone can create a coin of their own and trade it for profit. After the initial offering, the creators can shut down and run off with the investors’ money (there is no stable asset or insurance entity to recoup losses). False Independent Coin Offerings (ICOs) are common scams.
  • Rug pulls: Rug pulls are similar to coin offerings, but focus on the entire protocol itself. Developers realized that they could use Bitcoin for more than just a money supply and started to build Decentralized Finance (DeFi) communities that vote on and decide the direction of a particular token. While most DeFi outfits operate honestly, some fraudsters “pull the rug” from under the investor community, leaving with all the collected money.
  • Pump and dumps: While less intentional than rug pulls, owners with high stakes in cryptocurrencies will engage in viral marketing tactics that pump up a cryptocurrency. Once the token reaches artificially propped up values, the bad actors pull out their money and tank the token values.

Efforts are underway to limit the damage of such crypto-specific scams, but it is a good idea for users to understand the risks involved with cryptocurrencies.

2. Hacking

While the crypto network is safe from hacking, the individual digital wallets you might use to hold a cryptocurrency remain vulnerable. Private keys that store digital assets online are a current weak point, and since it is a decentralized system (i.e., not governed or regulated by one central authority), there is no way to recover tokens lost when in your possession. Hackers often focus on digital wallets that hold large sums of tokens.

Luckily, several secure digital wallets exist – both hosted (e.g., on an exchange) and self-hosted (where you manage your own private keys). Many owners also store their coins offline, immune from hackers. Large cryptocurrency exchanges continue to improve their cybersecurity to better protect their customer’s funds.

Why Do We Trust Banks With Our Money?

We trust our financial systems because of the high levels of authenticity. Governments and institutions have built a complex regulatory body that protects against fraud, maintains currency supply, and upholds price stability. The following regulatory bodies each help verify and control all monetary transactions:

  • Customer Identification Programs (CIPs): Under the USA patriot act, businesses must comply with CIP requirements to help limit money laundering and other illegal activities. Know Your Customer Compliance (KYC) is a standard identification program. CIPs also fit into the Bank Secrecy Act (BSA), which includes compliance with Anti-Money Laundering (AML) programs and suspicious activity reporting.
  • The Financial Crimes Enforcement Network (FinCEN): A branch of the state treasury, FinCEN enforces all BSA regulations and examines financial institutions for compliance, helping ensure the safety of the entire banking system.
  • Federal Deposit Insurance Corporation (FDIC): The FDIC offers the necessary liquidity for deposit insurance. All citizens and businesses of America are protected from undue losses in the event of a bank failure.
  • Federal Reserve: The Federal Reserve System makes macroeconomic decisions that help maintain the security of the US dollar and the American economy.

In summary, a centralized authority ensures the safety and price stability of the fiat currency system. The value and strength of the dollar are insured through monetary policy (central interest rates, minting new money, purchases of commodities, etc.). For consumers, such overt control makes fiat currencies a safe bet.

But there are problems. The American dollar has lost a significant portion of its value (a dollar in 1913 is worth $26 in 2020). The legacy banking system is also vulnerable to the same risks: scams, fraudsters, and crashing markets. The administrative costs to protect our system continue to hamper our economy’s strength.

Financial policy is ready for the innovation that cryptocurrencies provide.

What Makes Bitcoin Safe?

Bitcoin offers a new level of safety due to its underlying technology; many consider it better protected than most current financial systems. Even without a central authority, the Bitcoin security protocol is so strong that it would take insurmountable compute resources to crack private keys. Let’s look into the innovative nature of Bitcoin and what makes it safe.

1. Blockchain technology

Bitcoin uses a distributed ledger technology known as the blockchain. All transactions are submitted to a public pre-approval list, known as a mempool – once the transaction is deemed valid, a new block is added to the chain and the transaction becomes part of the public ledger. You cannot edit or reverse confirmed ledger information, meaning you can maintain a clear ownership history.

Bitcoin uses cryptography for enhanced security and to ensure the legitimacy of its blockchain. It generates an immutable transaction record that is guaranteed and protected by immense computing power, which authenticates each transaction in a block and prevents any double-spend. Any fraudulent attempt to spend money in a wallet not controlled by the attacker key gets thrown out by the network nodes.

Since no one can change or edit the cryptographically verified blockchain, it is easy to confirm the legitimacy of a transaction – a technology that is remarkably resistant to fraud.

2. Decentralization

Having a clear record of events also removes the need for a single judge (aka, a bank) to make decisions. Crypto developers want to avoid creating system weak points that could fall victim to attacks, hacking, bribery, etc. So, the verification of any cryptographic key spreads across the network of users who hold the specific digital token.

With decentralized blockchain technology, there is no single point of failure. It relies on consensus from the entire network through a public and open display. It is a case of safety in numbers, and the blockchain is highly transparent. If one part breaks down or falls victim to an attack, another server can jump in and maintain security.

3. Technical security

With the blockchain requiring extensive mathematical proofs solved across a massive network, a hacker would need over 50% of the network’s computing power to make any false changes to the blockchain (known as a 51% attack).

For one person to harness that much computing power is improbable – once again giving Bitcoin a level of security and corruption immunity unmatched matched in fiat systems, and competing cryptocurrencies (alt coins). It is a disruptive way of approaching digital transactions that could change almost every facet of global finance.

Bitcoin is as Secure as Its Technology

In short, while Bitcoin may feel new and risky, many would argue that it is far more secure than fiat currencies. Both crypto and fiat financial systems have benefits and drawbacks, but you can happily inform your customers that Bitcoin relies on some of the safest technology. As digital tokens continue to integrate into the economy and as regulation increases, it will only become safer. Bitcoin will likely become the base layer of the modern financial system, in a similar way that TCP/IP powers the internet we all know and trust today.

Want more information? Read about our Bitcoin ATM Placement and Ownership programs or contact, LLC today to chat with us in person about our turnkey Bitcoin ATM solutions.

Top 3 Challenges of Setting Up a Bitcoin ATM Company

Entrepreneurs and business owners are rapidly entering the Bitcoin ATM (BTM) market. Global installations of cryptocurrency ATMs have increased by more than 70% in 2021, continuing the 120% growth rate demand set in 2020. As a form of investment, people are taking advantage of the lucrative profits available from a well-run Bitcoin ATM company.

While a Bitcoin ATM placement might seem like a straightforward process, several challenges can hamper your kiosk’s profits. Bitcoin legal issues, administration costs, and Bitcoin ATM processing all require effort and preparation, and that resource expense can hurt your total return on investment.

To help make your Bitcoin ATM business opportunity a success and to prepare you for any start-up pitfalls, read on to learn about the three primary challenges associated with your cryptocurrency kiosk.

Challenge #1: Time

When tackled on your own, the entire BTM company process can take an average of four to six months. Since a Bitcoin ATM is a Money Service Business (MSB), you must obtain several compliance and business licenses to operate in your state, all of which require extra time. Plus, the legal requirements are complex, and you must source and hire a compliance officer to help prevent any undue risk. The various regulatory hurdles can stretch the start-up time of what looked like a simple ATM placement.

Beyond government requirements, there are also additional tasks involved with your kiosk setup. You will need to:

  • Source reliable software to handle your Bitcoin ATM processing
  • Register with a cryptocurrency exchange
  • Arrange for armored vehicle pickups to transport your fiat cash
  • Rent suitable real estate
  • And install your cryptocurrency ATM in your rented spot

While each of these start-up procedures is crucial to the overall success of your Bitcoin ATM, it does involve a lengthy time expense and a lot of additional effort.

Challenge #2: Costs

A series of overhead costs are necessary for any new Bitcoin ATM business.

  • Kiosk Purchases: You need to buy your physical kiosk itself, and prices can range from $3000 to upwards of $10,000.
  • Software Expenses: If your BTM kiosk does not include programming, you also need to pay for the internal software and any additional payment processing fees that facilitate all transactions.
  • Liquidity: Since a Bitcoin ATM transfers both Bitcoin and fiat currencies, it is required that you hold a certain amount of liquidity to ensure that every customer exchange request occurs without issue. For fiat transfers, you need a Bitcoin-friendly bank, and for crypto assets, you must purchase a hot wallet. The amount of liquidity you hold in each account depends on your Bitcoin ATMs transaction volume, but it often involves a sizeable amount of capital.

Beyond the overhead costs, you must also prepare for monthly expenses ($200-$300 a month) related to maintenance, repairs, and operational costs, along with setting fees for your armored vehicle transports.

Challenge #3: Security

Like any ATM, security is a critical element in the success of a Bitcoin kiosk, and there are some factors you must address to keep your machine safe.

  • Physical Location: You want to place your Bitcoin ATM along paths, malls, or public walkways that gain a lot of foot traffic. While open locations increase your machine’s total transaction volume and profits, it exposes you to potential theft. Most operators need to set up closed-circuit cameras and abundant lighting to deter bad actors.
  • Physical Machine Security: Each kiosk should have high-quality locks and reinforced steel to protect cash floats held within the machine.
  • Faulty Software: A Cryptocurrency exchange is only accessed online, and your machine uses applications to locate customer identification information. Unprotected software can fall victim to malware or phishing scams, and you might need to foot the bill for that fraudulent activity. Moreover, your applications have to connect with your payment processing partner for each transaction, and faulty software can cause costly errors.
  • Admin Security Codes: Many BTMs supply QR codes to represent the exchanged Bitcoins, and each machine uses an Admin password for kiosk management. While a single admin code is helpful, it becomes a critical weak point — if the top-level access is compromised, the entire machine becomes vulnerable. Owners often need support from a security partner to remedy this issue.

How ATMMachines Can Help

Even though setting up a Bitcoin ATM company has its own set of challenges, it remains a profitable venture, and most owners announce a break-even point after six months of operation.

To make the entire process of Bitcoin ATM ownership even easier for you, ATMMachines started a unique Bitcoin ATM Ownership program. It is a partnership program where all you have to do is secure a location and purchase a kiosk — ATMMachines handles all the rest!

In exchange for payment processing fees, you receive the following benefits:

  • Access to our compliance program and compliance officers for easy regulatory approval
  • Free shipping, set up, and installation of your kiosk
  • Use of our software for all simple payment processing and high-level admin security
  • Use of our Bitcoin supply. No need for a hot wallet, the purchase of bitcoin, fiat liquidity requirements. Plus, reduce your risk exposure for each customer transaction.
  • Piggyback on our armored carriers with company-specific locks and preferred freight rates

As your partner, all the hassle and challenges that would threaten the success of your Bitcoin ATM diminish, and you can enjoy better profits. Best of all, you maintain full ownership over your kiosk!

Wrap Up

While it may seem like a simple kiosk placement, starting a Bitcoin ATM business does come with a set of challenges that can increase your overhead costs and extend your break-even point. If you want to start your venture in Bitcoin ATM entrepreneurship with less difficulty and better scalability, a partnership with, LLC can turn your kiosk start-up into a simple process with an enhanced ROI.

Do you want more information? Check out our Bitcoin ATM services page to learn more about our Bitcoin ATM Ownership Program.

Are Bitcoin ATMs Legal in New York?

Bitcoin’s surge in popularity has contributed to a rapid increase in Bitcoin ATM (BTM) installations. Previously, governments used to frown upon the exchange of Bitcoin. The decentralized, anonymous, and private nature of cryptocurrencies seemed unsecured, and since no official regulatory body governed digital tokens, Bitcoin ATMs felt like a legal grey area.

Nowadays, you might have seen the many ATM signs offering Bitcoin transfers in shops and convenience store windows. Almost 300,000 Bitcoin transactions occur every day, and there are currently 199 Bitcoin ATMs stationed in New York alone. Even large enterprises such as Paypal and Microsoft accept Bitcoin as consumer payments.

So, are Bitcoin ATMs Legal?

Yes! But that does mean the government enforces a series of regulations that uphold the safety of all physical cryptocurrency exchanges. If you plan to invest in a BTM, you must attain compliance, and failure to do so can lead to severe repercussions. Read on to discover how you can set up a legal (and profitable) Bitcoin ATM in New York.

What are the Legal Requirements for Owning A Bitcoin ATM in NY?

Every country and state has different laws that concern the transfer of money, even for cryptocurrencies. The Financial Crimes and Enforcement Network (FinCEN)  is the primary governing body in the United States, and it helps reduce fraud, theft, and the illegal use of money. Bitcoin remains decentralized, so FinCEN does not concern itself with the unregulated token, only the transfer of funds initiated by Money Service Businesses (MSB).

Money Service Business Compliance Requirements

Since Bitcoin ATMs transmit money, they are considered MSBs, and that brings several requirements you as a BTM owner must complete under New York state and federal law.

  • Register with FinCEN: Registration with FinCEN as a Money Service Business is necessary. Not only does this protect you under the Bank Secrecy Act (BSA), but it allows you to use your BTM in the United States legally. Registration occurs every two years.
  • Create a KYC and AML compliance policy and program: Know Your Customer (KYC), and Anti-Money Laundering (AML) compliance standards ensure that all personal identification is kept private and that your Bitcoin kiosk prevents the illegal use of means.
  • Hire a compliance officer: You must designate or hire a qualified officer who becomes responsible for the efficient operation of your BSA, KYC, and AML policies. The officer must possess expertise equal to the risk associated with your BTM, determined by the number of potential transactions and cumulative value exchanged.
  • Obtain all necessary state licenses: Beyond the federal requirements, individual states have different laws concerning money transfers and Bitcoin itself. The New York Department of Financial Services (DAF) allowed for Bitlicense and the operation of virtual currencies, but additional requirements may arise as legislation continues to change.
  • Set up a Money Service Transmitter License: New York also requires Bitcoin ATM owners to obtain a Money Transmitter License (MTL). An MTL license ensures that you maintain a certain amount of liquidity to facilitate all money requests, and it also involves the submission of additional financial documentation.
  • Maintain specific insurance policies and surety bonds: You must submit to your state office or the Nationwide MultiState Licensing System (NMLS) several other documents such as a business plan, proof of net worth, and proof of insurance. Fees often apply, and you might need to register for standard operating business licenses within the state of New York as well. In many cases, a fiat surety bond to ensure the safety of all user transactions is required.

How Can ATMMachines Help?

Achieving compliance with your Bitcoin ATM is a time-consuming and complex process. Many owners spend thousands of dollars compiling all the necessary documents and compliance requests, and the timeline to profitability can extend by four to six months. Moreover, regulators continue to update and alter the legal requirements with Bitcoin use, further complicating the entire system. Starting a Bitcoin ATM business from scratch is a significant undertaking.

To simplify the lengthy setup process associated with a Bitcoin ATM for entrepreneurs,, LLC has created the Bitcoin ATM Ownership Program. It is a turnkey program that allows entrepreneurs to own and operate a Bitcoin Kiosk — without any upfront hassle.

The Bitcoin ATM Ownership Program

To give you a better return on investment and a faster time-to-profitability, we handle every element involved with starting a Bitcoin ATM business, including all compliance and legal requirements. Take advantage of the following benefits:

  • Federal registration: Piggyback off our Money Service Business license and any additional AML policies.
  • Know Your Customer training: Learn how to employ a proper KYC program to reduce fraud and remain compliant.
  • Access to a BTM compliance officer: Our compliance team monitors and reports transaction information according to state and national law.
  • State licenses specific to New York: We can obtain any licenses unique to your jurisdiction with ease (if we don’t have them already).
  • Preferred rates for armored vehicle transfers: Enjoy better fees for cash transfers from your ATM.
  • Liquidity: Use our Bitcoin for any customer transactions, eliminating any fiat liquidity requirements and the need for a cryptocurrency hot wallet.

We offer each of these services to any customers who purchase a Bitcoin ATM through us. All you need to do is select and set your kiosk, leave the rest to us. Since we offer a partnership program, you remain the sole owner of your Bitcoin ATM, giving you access to the lucrative Bitcoin markets without the time-consuming process of meeting each legal requirement for an MSB in New York.

Key Takeaway

A Bitcoin ATM is a legal and profitable venture in New York state. But the compliance and regulatory hurdles involved with ownership are extensive and complex. The startup process can be time and labor-intensive, from finding compliance officers to obtaining money transmitters and business licenses. If you want a simplified way to start a Bitcoin ATM business, take advantage of our unique Bitcoin ATM Ownership Program.

Curious about our Bitcoin ATM programs? Visit our service page for more information.

The Digital Future of Money

You’ve probably heard of Bitcoin and the new types of crypto coins the past year. Digital tokens continue to grow in popularity, and the global adoption of crypto assets increased by 881% in the past year. The world has begun to accept the idea of digital money, and that disruption has altered the public view of technology-based finance.

Unsurprisingly, countries across the globe have taken different stances towards digital assets. Cryptocurrencies are unregulated and decentralized, and that opposes the current financial system used by most governments. But even the staunchest critics have begun to welcome the new form of value and its underlying blockchain technology, and many countries now consider it an avenue to generate wealth.

It appears that crypto, alt-coins, and digital money are here to stay, so let’s take a look at what cryptocurrencies are and how governments across the globe are approaching the new form of digital payment.

What is Cryptocurrency?

A cryptocurrency is a digital form of money that uses cryptography to record and secure financial transactions on a public ledger. Since the public ensures the validity of each crypto asset on the ledger (in most cases built from blockchain technology), it is considered decentralized because no single member controls or regulates supply.

Most cryptocurrencies use tokens to determine their value and facilitate exchanges. Since each token has no underlying asset, the price of an individual cryptocurrency relies on benchmarks such as the USD or other crypto tokens. Supply and demand determine price fluctuations, so you can consider each cryptocurrency as a type of “digital gold.” Bitcoin is the most popular cryptocurrency and has a limited supply (21 million).

Any unregulated form of money with no asset base involves risk, and that is part of the reason why governments have shied away from cryptocurrencies. But digital cash manages that risk with its public ledger, providing better privacy, security, liquidity, and payment flexibility.

Digital Money Around the World

It is much easier to transport, buy goods and services, and send payments with digital cash. The reliability and transfer speeds of digital tokens can disrupt the slow and outdated financial systems of fiat money, so countries around the globe have warmed to the idea of cryptocurrency.

North America

North America has accepted Bitcoin and other cryptocurrencies as forms of money, but extensive government regulation continues to slow the broader use of digital tokens as payment.

About 13% of Americans traded cryptocurrencies in 2020, but institutional purchasing by corporations should drive change. 36% of small businesses now accept Bitcoin, and corporations such as Home Depot, Tesla, Starbucks, Walmart, and Microsoft all have Point of Sale (POS) systems for crypto tokens.

The Federal Reserve first disregarded cryptocurrencies but has since put numerous regulations to help protect crypto users from fraudulent activity and scams. Further change and governmental acceptance are apparent with the feds unveiling their own Central Bank Digital Currency (CBDC).


Asia is responsible for the largest retail adoption of Bitcoin, with many emerging markets taking advantage of the digital coins and their ability to store value outside of the U.S. Dollar (the world’s reserve currency).

Data platform ChainAnalysis measured the increase in peer-to-peer crypto exchange use, with Vietnam, India, and Pakistan taking the top three spots. Bitcoin use in Vietnam even doubled year over year, most likely due to the influence of Bitrefill, a crypto-based gift card exchange company.


Conversely, China declared that all cryptocurrencies are illegal, causing dips into crypto asset prices and lower usage within the region. All mining, exchange transactions, and bank transfers with crypto assets are forbidden while the authoritarian government creates a digital Yuan.

South and Central America

El Salvador committed a historic ruling and became the first country to accept Bitcoin as legal tender. All Salvadoran businesses must now facilitate payments via Bitcoin. The unprecedented legislation sparked renewed interest in cryptocurrencies in Latin America:

  • Paraguay: lawmakers presented a bill to turn Bitcoin into a commodity and thus collect taxes on it, a move met with much disdain from crypto users.
  • Panama: Congressman Gabriel Silva presented Crypto Law, a bill designed to promote Bitcoin as the future of Panamanian money.
  • Brazil: The Brazilian House of Representatives approved bill 2.303/15 to make Bitcoin legal tender, stating that it is a recognized asset for real estate and daily retail purchases.

Other countries such as Mexico, Venezuela, and Argentina are all exploring cryptocurrency to solve high inflation problems and the cost of USD remittances.


Even though many African nations do not officially recognize cryptocurrencies as a form of payment, Kenya, Nigeria, and South Africa report extensive transaction volumes in consumer and commercial markets. Kenya traded over $920,000 worth of crypto assets per week in the first quarter of 2021. The private development of a Kenya-based digital token, Akoin, is in place (with backing from wealthy rapper Akon).

In South Africa, recent data suggest that close to 50% of all South Africans own a cryptocurrency, and Nigeria received over $2.4 billion worth of crypto assets in the first quarter of 2021, volume second only to the United States. The Nigerian government scrambled to prevent such untaxed money supply, outlawing crypto exchanges before establishing a government-controlled token called eNaira.

Is the Future of Money Digital?

While governments grapple with control over unregulated digital tokens, the benefits to GDP growth, cross-border payments, remittances, and flexible payment solutions make cryptocurrency and its technology unavoidable. Worldwide demand for digital tokens and governmental attempts to create individual coins shows how valuable blockchain-based assets are to global markets.

While a hot wallet to hold digital tokens is not a requirement for most people who use fiat money, the opportunity for optimized and convenient digital banking systems is available if you accept stable cryptocurrencies. Bitcoin, Ethereum, and other government-backed digital forms of money have disrupted traditional methods of transactions, and you can use digital tokens to make purchases with lower fees and less hassle at faster speeds. The future will involve digital money, and those who invest will remain at the forefront of financial innovation.

One of the best ways to capitalize on the growing trend of Bitcoin is a Bitcoin ATM company. Crypto ATM installations have increased 70% this year as entrepreneurs facilitate cash-for-bitcoin exchanges for crypto users. A Bitcoin ATM can increase foot traffic to your business, collect transaction fees for profit within six months, and give you access to digital value stores that can outperform inflation. It is an excellent way to explore the lucrative markets of digital currencies.

Curious about entering the Bitcoin ATM market? Check out our Bitcoin ATM service page for more information. 

Is Owning a Bitcoin ATM Profitable?

While the value of a single Bitcoin has skyrocketed compared to the American dollar and far surpassed any gains made from the S&P 500, you might still question the reliability and overall investment security of a cryptocurrency ATM. Concerns about market volatility, crypto ATM fee rates, the popularity of Bitcoin, overhead costs, and the consumer demand for physical exchanges may put you off investigating the entrepreneurial returns of a cryptocurrency kiosk.

The concerns are not unfounded, but recent data shows a robust business opportunity available worldwide:

  • Over 24,000 ATMs are installed globally as of July 2021 (up from the 9000 a year before)
  • The Crypto ATM Market was valued at $54.8 Million in 2020
  • The compounded growth rate is forecasted at a massive 58.7% CAGR

Investor interest, revenues, and customer desire are clearly present. Will the rapid growth of the Bitcoin ATM market continue? Can a machine create a profit in 2021? What return on your investment can you expect, and what costs will lower that return? Let’s do the math on how profitable a Bitcoin ATM (BTM) can be.

What Are The Costs of Buying and Owning a Bitcoin ATM?

There are several upfront overhead and recurring costs to plan for when assessing the value of a BTM.

1. Machine Type:

Each machine type comes with differences in price point:

  • Freestanding – Freestanding machines are ideal for locations with ample space and convenient with minimal installation. They are the most popular kiosk type but have a higher price point (A Chainbytes model costs $6500).
  • Built-in – Desktop models are smaller, have fewer features, and offer a lower price point (A Chainbytes model costs $3500). That said, their installation costs are higher. Gain more real estate and security with built-in wall-mounted BTMs.
  • Pre-owned – Resellers markets have flourished, and you can often find models with 30-50% reductions in price. Users accept more risk and potential defects with pre-owned models.

2. Installation and Training Costs

Shipping, delivery, and installation will add to your overhead expenses, with reports stating you should expect $2-3K in startup costs. This stems from import fees, machine installation from your manufacturer, and shipping costs.

3. Transaction and Commission Fees

Your Bitcoin manufacturer processes all payments via your kiosk’s software. That comes with transaction and commission fees, either as a percentage range of 1-12% or a flat monthly fee ($100 per unit, per month for Lamassu). Also, banks will charge a fee for each fiat-to-crypto exchange and will often include surcharges to Bitcoin hot wallets.

These fee rates follow market conditions or are removed depending on your financial institution, kiosk, and Bitcoin ATM manufacturer.

4. Liquidity Requirements

You are required to hold liquid assets in both fiat and cryptocurrencies, with most operators opting for a 50% percent split between both currency types. The ideal amount of liquidity is based on your kiosk’s total transaction volume and if you pool cash through several machines. You will also have to maintain compliance and pay any sign-up or regulatory fees as your state requires.

5. Machine Maintenance

According to a Deloitte study, the standard ATM repair costs average about $150 a month. The price point for BTMs can increase as the supply of technicians with expertise in cryptocurrency kiosks is not as expansive. The fees come from both physical and software defects or malfunctions.

6. Operational Costs

You will also need to train employees to collect cash and operate the machine, with operators budgeting for $200-$300 per month for those intangibles. Additionally, there are the standard utility costs and supplies payments for receipt paper, branding, and customer support. The most expensive recurring operational cost is your real estate rent, depending on where you place your ATM.

So, How does a Bitcoin ATM Make Money?

BTMs recoup costs through a margin for profit attached to any fees levied on the consumer. Each machine achieves a return on investment in three primary ways:

1. Transaction Surcharges

Transaction surcharges are the direct fee percentages you apply to your customer for each transaction they make. These are the costs associated with trading crypto coins on internet-based exchanges.

Whether they are included in the spread between the fiat and cryptocurrency rate prices or applied as a percentage of the transaction, the fees involved with making a market, processing payments, and shifting currencies between hot wallets and financial institutions pass onto the consumer and can include a profit margin (often between 1-4%).

2. Commission Fees

Commission fees are the direct earnings percentage of an ATM. This is your labeled fee for service and can fluctuate as you wish, with averages quoted at 10%. Commission fees change based on real estate prices, credit card or debit card fees per transaction, costs included with hot wallet hosting, ACH fees from banks, institutional transfers, and fast payments.

Commission fees mean that the bulk of your profits comes from a high transaction volume. The average kiosk makes about 30,000 transactions a month, translating into a $3000 a month profit.

3. Increased Foot Traffic to Existing Stores

Consumer demand for the convenience of a Bitcoin ATM can drive target markets to your current business. Retailers state they earned an additional $3500 per month from the increase in foot traffic and that 25% of new customers came from a prominent Bitcoin ATM placement. For store owners, the knock-on effects of a Bitcoin ATM can further post profits.

Benefits of an ATM Processing Partner

With the rate of fees and the overall popularity of Bitcoin, a cryptocurrency ATM is still highly profitable. Many companies meet breakeven points between 3-6 months and continue with steady streams of passive income. You can judge your own earning potential and ROI timeline with this handy calculator.

You will need a company to process payment transactions between a bank and your customer (i.e., pulling up customer identifications and Bitcoin Hot wallets); with, you do not pay any of those costs, further increasing your profits. You can also take advantage of our 0% ATM processing fees when purchasing one of our kiosks.

Partner with, LLC to start a lucrative business opportunity with a Bitcoin ATM. Click here for more information about our online ATM Business Course or here to request a consultation.

What Is the Best Bitcoin ATM?

Bitcoin ATMs (BTMs) have surged in total installations and consumer use as cryptocurrencies grow in popularity. Customers and businesses alike have pivoted to digital currency as a method of payment transactions, and that has propelled the BTM market to a forecasted 58.7% compounded annual growth rate between 2020 and 2026. Placements of cryptocurrency ATMs have increased (above 23,000 as of July 2021) as entrepreneurs meet consumer demand for access to Bitcoin.

As the Bitcoin ATM market is flooded with more machine options (and at varying states of quality), it becomes increasingly difficult to find the ideal Bitcoin machine that can meet and surpass your success metrics. The BTM you select will affect your potential return on your investment, and well-supported and high-level kiosks can reduce your expenses, limit support tickets, increase security, and offer better ease of use.

Finding the right selection criteria and applying them to different BTM providers ensures you make an informed machine purchase that protects your investment.

Introducing Chainbytes

We have already shown you our top three picks for the best ATMs available for installation (which you can read here), and in this blog, we will review another excellent Bitcoin ATM provider — Chainbytes. We will look into their line of 2-way and desktop kiosks, along with a new 2020 ATM release of Chainbytes 2.0 +.

Tips for Buying the Best Bitcoin ATM

Before we dive into Chainbytes and their Bitcoin kiosks, it is important to know the benchmarks of top-level BTMs to help compare the strengths and weaknesses of each machine. Use the following selection criteria to ensure that you purchase the right BTM for your needs and get the most value from your purchase:

  • Partnerships. Bitcoin ATMs integrate with a variety of partner solutions to facilitate all transactions and innovative solutions. Connections between your bank, hot wallet, online cryptocurrency exchanges, and manufacturer support rely on physical and digital infrastructure. The more partnerships a BTM has, the more reliable and scalable you know their solutions are.
  • Local Support. For those that want to set it and forget it, finding a manufacturer that offers robust technical support is critical for ease of use and reduced downtimes. From hardware malfunctions to software repairs, high-level local support can pay dividends in the lifecycle of your BTM.
  • Warranty. Component replacement and effective manufacturing warranties can protect you from software errors or defective kiosks. A comprehensive warranty will cover any expense for parts (often including shipping), and it speaks to the customer service of your Bitcoin ATM provider.
  • Security. A high level of security is critical to prevent theft, fraud, or other malicious activity that can hurt profits. Look for machines with strong physical structures and locking mechanisms, secure digital environments, and several other security features, such as pin code requests, cameras, and ID scanners.
  • Compliance. Money service businesses and payment providers are subject to stringent regulations (even though the currency itself is deregulated). Select a Bitcoin ATM that meets compliance standards such as Anti-Money Laundering (AML), Know-Your-Customer (KYC), and Customer Due Diligence (CDD).

These tips and quality metrics can help you select the perfect Bitcoin ATM for you and your business.

ChainByte Bitcoin ATM Review

ChainBytes is a blockchain software and hardware company with a stated focus on “complete turnkey solutions.” As blockchain experts, they provide technology applications such as digital pay and blockchain tokenization, and the company’s value stems from their plug-and-play BTM manufacturing services.

By simplifying the creation, technology service, and installation of crypto ATMs, Chainbytes allows you to create effective white label business models for BTM investments. You can even apply branded wraps to the outside of their machines for efficient marketing material. The software technology is the primary driver of Chainbytes’ success, and what they lack in customer support and distribution, they make up for in BTM customization.

Chainbytes also scores well according to our selection criteria:

  • Partnerships. Chainbytes has a series of partners that facilitate distributing its software services, but the company is limited in its software integrations. Since Chainbytes has its own high-level software solutions, it does not rely on other technical partners. For the sale of machines in new markets, technician support, and compliance requests, Chainbytes has partner integrations with companies such as Hippo Kiosks, BTM Compliance LLC, CoinOutlet, and Bayside Corporation.
  • Local Support. Chainbytes puts less importance on local support than market competitors because they base their value on proprietary blockchain technology applications. Resources are directed toward custom-made alt-coin IOS wallets, smart contracts, and tokenization rather than direct support services. Third-party integrations do offer technical support when needed.
  • Warranty. A one-year warranty applies to machine defects, but the software is excluded from liability. This is satisfactory to market conditions, but not ideal.
  • Security. The machine contains standard security protocols and steel manufacturing, but most of the security comes from its extensive software technology. Chainbytes is considered an enterprise solution, and it contains premium software components designed for the protection of all internal systems. As proof, Chainbytes maintain decentralized autonomous organization (DAO) transaction records, which involves a high level of security.
  • Compliance. Chainbytes covers all major compliance requirements for you — but it does come with an extra fee. For $1500, a third party will send a designated compliance officer to ensure registration with FinCEN, KYC, AML, and any other location-specific regulations. The machines themselves have the required ID scanners, thermal printers for receipts of QR codes, and customer identification cameras.

Chainbytes BTM models

As for physical machines, Chainbytes offers three options: Two versions of two-way stand-up kiosks (you can both buy and sell cryptocurrencies with your fiat money) and a one-way desktop style. The most recent Chainbytes 2.0 + is the more feature-laden upgrade to the standard stand-up model, offering a touch screen display, cold-rolled steel, additional top mount marketing screen, and a cash recycler.

For those with smaller budgets and fewer feature requirements, the desktop model may be of interest. It maintains regular one-way transactions at a better price point (an average ROI spread of 3-6 months). Each kiosk is customized according to the requirements of your business, all within simple white label redesigns.

As the Bitcoin ATM market continues its rapid growth, owning a Bitcoin ATM is a profitable venture. But your return on investment will hinge on the quality of your ATM kiosk and its supporting partners. Chainbytes scores well on our list of metrics. For businesses wanting scalable technologies beyond blockchain with simple machine customization, their kiosks are ideal.

If you would like a quote on a Chainbytes Bitcoin ATM, contact us here, and we would be happy to help you through your installation process.

[Guide] How To Buy a Bitcoin ATM in 3 Easy Steps

The number of Bitcoin ATM (BTM) installations has grown exponentially as the popularity of Bitcoin and the entire cryptocurrency industry expands worldwide. Business owners and entrepreneurs have rapidly entered the digital token markets as infrastructure and consumer demand for convenient cryptocurrency exchanges have increased – setting the stage for healthy revenue projections and robust profit margins.

If you plan to buy a Bitcoin ATM of your own and pursue a business opportunity in the lucrative crypto market, follow these three basic steps to ensure hassle-free revenue growth. Each step offers considerations to help you achieve a faster return on your investment — with lower overhead expenses and minimal errors.

Follow the outline below to make informed decisions that contribute to your ATM’s bottom line and total profits.

Step 1: Do Your Research

The more you understand the overall Bitcoin ATM market and any potential pitfalls along your path to ATM ownership, the less friction you involve within your business and its earnings. Be sure to research the following points:

  • Confirm overhead costs and potential profits. Weigh the initial startup costs against your kiosk transaction volume and consumer commission fees so that you can determine the projected revenues and the timeline till profitability. Include expenses such as your kiosk purchase, operational costs, and maintenance fees, and then compare them to your expected return per customer and monthly earnings. For a detailed look at the average profits and expenses of a Bitcoin ATM, learn more here <Insert Hyperlink>
  • Research the ideal location. Your Bitcoin ATM makes money on each customer transfer via levied fees, so the more transactions, the more profit. Locations that provide direct access, convenience, and high levels of foot traffic offer the best transaction performance, so search for an ATM placement that fits these criteria. Moreover, real estate costs can account for the largest expense to your venture, so finding an ideal locale has an impact on your ATM’s profit ratios. For more information on Bitcoin ATM locations, read all about it here. <Insert Hyperlink>
  • Determine kiosk type. Some machines only purchase Bitcoin and do not offer the ability to sell it through an internet exchange. These one-way machines work for fiat-to-crypto transfers and have fewer expenses; however, they usually come with limited features compared to two-way options. Select the machine type that fits your business goals and consumer demand.
  • Select the ideal machine. Different ATM kiosks vary in price according to add-on features such as top-mounted ad monitors, touch screens, and thermal printers. Stand-up models cost more than smaller desktop versions, and built-in wall mounts have increased installation expenses. Choose the ATM that fits your budget and requirements.


Step 2: Tick Regulation and Compliance Boxes

Cryptocurrencies are decentralized, but they still fall under several regulatory and legal frameworks. Failure to attain compliance can result in fees and a significant delay to your ATM’s profitability. Make sure you are compliant in the following areas:

  • Register with FinCEN. The Financial Crimes Enforcement Network (FinCEN) monitors all compliance issues related to payment processing, even with deregulated cryptocurrencies. The governing body protects against fraud, terrorist financing, laundering, etc., so ensure that you register as a legal ATM kiosk owner.
  • Register for your Money Service Business (MSB) License. An MSB License is federally required for any business that transmits and exchanges money. As a Bitcoin ATM owner, you must electronically register for your MSB license with the Department of the Treasury (Upheld by FinCEN). Registration is simple and covers a two-year time span.
  • Register for any state compliance and additional regulations. Different states approach the acceptance and legality of Bitcoin at varying levels. Check-in with your local state authority for these individual requirements. Other compliance documentation such as Know Your Customer (KYC) is also required, though many of these regulations are covered by your ATM processing partner.
  • Be AML compliant. Extending from the Bank Secrecy Act, crypto ATMs must have Anti-Money Laundering (AML) compliance. AML helps prevent the illegal use of money and deters fraudulent activity. It is your responsibility to keep detailed documentation about customer identification and your machine’s transaction record. Ensure that your kiosk and data collection follow AML compliant internal protocols.

Step 3: Find Partners

Bitcoin ATMs fit within a larger ecosystem of financial institutions that facilitate and service the direct exchange of currencies. It is in your best interest to find the following partners to help safeguard your investment:

  • Find a legal partner. Since Bitcoin and other cryptocurrencies are a newer phenomenon and still involve a small amount of skepticism, it is a good idea to connect with a legal partner who can help you traverse the legal compliance requirements of your particular jurisdiction. Not only does this minimize costly delays, prevent errors, and minimize compliance fees, but it adds a level of insurance in the event of money laundering or illegal activity committed by users on your Bitcoin ATM.
  • Connect with a crypto-friendly bank. You need to connect your cryptocurrency hot wallet to a traditional institution for the liquidity requirements of fiat currencies. Unfortunately, not all banks will accept the risks involved with cryptocurrency exchanges. Look for a banking partner who is comfortable with alt-coins, digital tokens, and fiat-to-crypto transfers.
  • Partner with a reputable ATM processing company. Each ATM needs a processing partner who operates the actual software mechanics of each exchange, such as PIN confirmations, hot wallet location, and service transactions. Select a partner with robust service offerings, low fees, and who can help you and your Bitcoin ATM succeed.

With those three simple steps, you are well on your way to entering the Bitcoin ATM industry! Keep the information above in mind, and then make a purchase that fits your budget and goals.

How can assist?

When you purchase a Bitcoin kiosk from us, you receive 0% in processing fees. We help install and program your BTM and assist with the technical and legal hurdles associated with owning a Bitcoin ATM Business. We set up your hot wallet, have established relationships with crypto-friendly banks, and let you use our federal registration and state licenses to meet compliance regulations.

If you are interested in installing a Bitcoin ATM and want more information about partnering with us, contact us here.

Best Placement For a Bitcoin ATM

While early adopters of Bitcoin celebrated the placement of the first Bitcoin ATM Machine in Waves Coffee shop, many curious viewers paid minimal attention to the yet-unknown digital currency phenomenon. Fast forward to 2021, and Bitcoin (and several other cryptocurrencies) have skyrocketed in use and popularity, with large sale outlets and businesses now offering money transactions in Bitcoin and Bitcoin ATMs (BTMs) for convenient fiat-to-crypto exchanges.

The BTM market is experiencing a rapid expansion in line with consumer demand, and cryptocurrency kiosk installations are increasing with massive year-over-year growth rates between 50-80%. The total number of BTMs worldwide has surpassed 23,000 in July 2021, up from the 9,000 stated the year before.

Even top brands such as Tesla and Microsoft have accepted the advantages offered by cryptocurrency payments. Low transaction fees, extended privacy from the decentralized currency, improvements in security from blockchain technology, the lack of government involvement, and the overall ease of use have attracted consumers and market makers alike, further driving Bitcoin’s popularity.

If you are a store owner or plan to install a Bitcoin ATM, now is the ideal time to enter the market.

How Popular are Bitcoin and cryptocurrency in the United States?

In particular, the growth of Bitcoin ATMs in the United States is unmatched:

  • America surpassed 11,000 placed BTMs as of January 2021 (For reference, the nearest competitor Canada has just over 1000).
  • Retail giants Walmart and Target now offer crypto-based gift cards to accept Bitcoin as payment for goods and services.
  • Home Depot and CVS have point-of-sale infrastructure that accepts multiple cryptocurrencies.
  • The Bitcoin ATM market is worth 54.83 million as of 2020.
  • The growth targets of the Bitcoin ATM market are expected to hit 204.8 Million by 2026.

As consumer demand for seamless cryptocurrency transactions (B2B and B2C) increases rapidly, Bitcoin ATMs present a fortuitous business opportunity.

Let’s discuss a crucial element that determines your BTMs success: Location.

Why Is Location So Important for the Success of a Bitcoin ATM Machine?

Your customers use a Bitcoin ATM because the exchange machine offers several benefits compared to a traditional online exchange or a peer-to-peer marketplace:

  • Convenience 
  • Availability 
  • Speed 
  • Support 
  • Security 
  • Privacy

The placement of your BTM either supports these benefits or creates barriers to them. Transaction volume is a key metric of success for a Bitcoin ATM. Your machine’s performance will rely on its ability to attract users – location either creates the ideal environment or hampers it.

For example, establishments with long working hours have a better chance for success, and kiosks placed in populated venues, where BTM users are more likely to visit, have greater odds at continued use. On the other hand, putting your ATM in an area that is difficult to access or has low foot traffic will decrease user convenience, availability, and speed.

In short, when deciding on the ideal location for your BTM, remain customer-centric in your placement:

  • Convenience – Look for areas with high volumes of foot traffic and a dense population of target users, two elements that increase machine usage. Traditional ATMs average 1-3% transactional volume to total foot traffic access, so select a place that offers convenience for nearby patrons.
  • Availability – How often can someone access your machine? Is it accessible, easy to find, visible, and has extended hours of use?
  • Speed –  The length of a lineup (even if only perceived) can deter customer action. Bitcoin ATMs that create convoluted lines, restrict movement, or spill into walkways can limit usage. Even the availability of parking and access to a highway can either promote or prevent users. Select a spot that allows for fast transactions.
  • Support – As Bitcoin’s popularity grows, you will receive new customers who need extra support. If you already have a business footprint, this can help increase your machine’s transaction volume and in-store sales (some bitcoin owners say store sales improved by 10-30% with their Bitcoin ATM installation). If you are a solo entrepreneur renting real estate, placing a BTM close to human support can boost total machine use.
  • Security – Not only will a secure location prevent scams or malicious activity, but it builds user trust. Find a well-lit location if possible. Venues such as malls also offer additional security.
  • Privacy –  As a core tenet of Bitcoin, search for a location that offers an element of privacy. Maintain your access to direct foot traffic, but avoid exposed areas such as open walkways.

Ideal Venues for Placing a Bitcoin ATM

Customer-centric BTM placement will always offer an enhanced return on your investment, but the actual real estate you purchase or rent for your machine will also affect performance. Gas Stations are the most popular locations for an ATM in general, with casual dining and public-use spaces occupying second and third. These are all venues with extended foot traffic, access, fast exchanges, and availability.

Coin ATM Radar released BTM data based on customer usage, with restaurants owning 12% of all transactions, coffee shops in second with 9%, and the company office tied with the shopping mall at 7%.

These numbers are also affected by considerations such as the cost of real estate rentals, the prevalence of current store owners to accept Bitcoin ATMs, and the openness of public spaces for crypto ATMs. BTMs perform better when placed in a location that also accepts cryptocurrencies as a form of payment for goods and services, helping build a more robust payment ecosystem.

With these factors in mind, we suggest you look into the following locations for your own BTM placement:

  • Nightclub/Bar – Surcharge fees and the need for quick cash can boost ROI.
  • Hotels and Airports – Travelers often want to avoid currency exchanges, and a Bitcoin ATM can solve that pain point.
  • Grocery stores – Stores offer various goods and services, and customers want to make bulk purchases with cash or crypto.
  • Gas stations – Foot traffic volume and the prevalence of cash make gas stations ideal for BTMs.
  • Event Grounds – Fairs, carnivals, and entertainment venues often support cash-use only. A well-placed Bitcoin ATM can receive extended use from targeted users.

As Bitcoin grows in popularity, business owners can take advantage of the unique opportunity a cryptocurrency ATM provides. Be sure to consider the placement factors noted above when selecting an ideal location; you want to place your BTM where high transaction volumes are more likely for continued profitability.

If you are interested and want to set up your own Bitcoin ATM installation, you can find more information about our BTM placement services on our Bitcoin Service Page.

The Future Of Bitcoin? El Salvador Makes Bitcoin Legal Tender

In a ground-breaking vote from congress, El Salvador has become the first country to accept Bitcoin as legal tender. By securing 62 of 84 votes from legislators, the bill reclassifies cryptocurrency’s acceptance, use, and function within the country. The ripple effect of this change has set a new global precedent, and other countries around the world have started to accept Bitcoin as a form of digital payment.

With legal tender status, Bitcoin (BTC) is now considered an official currency by the El Salvadoran government and will fall under similar fiat currencies’ standards and compliance regulations (El Salvador’s reserve currency is the U.S. Dollar). All debtors, businesses, and payment processors must accept Bitcoin as remuneration when offered.

Why Did El Salvador Formally Accept Bitcoin?

The passed bill is considered innovative but has also fallen under intense scrutiny. Global lawmakers are cautious of digital currencies since they are decentralized and deregulated. El Salvador did receive some pushback after its central digital wallet went offline. While that may show some of the instability involved with cryptocurrencies, the delay came from added server capacity as large corporations such as Mcdonalds began accepting payments in BTC.

Outside of simple access and a progressive approach to fiscal policy, the El Salvadoran government instituted Bitcoin for several other reasons:

1. Foreign Investment, Job Creation, and Financial Literacy Gains

President Nayib Bukele stated that the move into Bitcoin would create pathways for foreign investment, boost the economy with more jobs, and provide access to a primarily unbanked nation. 70% of El Salvadorans do not have bank accounts because of a lack of financial access and an overall distrust in formalized savings. With digital cryptocurrencies (and their ledger systems located on blockchain technology), public access, security, and convenience can promote financial literacy and a usable asset class for the government. Investment, inclusion, and economic development are the key factors driving the Bitcoin decision.

Moreover, money transfers fees made from abroad make up close to 20% of El Salvador’s GDP. The move to a flexible digital token can accelerate that monetary growth while removing payment barriers for the nearly two million Salvadorans outside the country.

2. Remittance and Payment Transfers Made Easy.

Six billion USD flowed into El Salvador in 2019, one of the highest remittance ratios in the world. Of those transactions, the amount initiated via Bitcoin increased by four times from the year before. Bitcoin funds sent from worldwide locations increased to 1.7 million in USD, up from the $424,000 the year prior.

Salvadorans have already capitalized on BTC as a method for remittances. Chainalysis states that payments less than $1000 increased from about 1000 transactions in April 2019 to 12,000 transactions in June 2021. The monthly value of BTC transfers boosted from $178,000 to $2.6 million in the same time frame.

How Did We Get Here?

Much of El Salvador and its historical and political connection with the United States have led to the landmark inclusion of Bitcoin as legal tender.

In the 1990s, the country had just emerged from a long civil war that had decimated the economy. To keep interest rates low, promote global trade, and propel the economy forward as it held steady inflation rates, El Salvador went through a process of dollarization, where it connected itself to the USD as a reserve currency.

This coincided with many Salvadorans abandoning the war-torn state for the safety of North America, starting the now common practice of remittance and payment transfers critical to El Salvador’s present economy.

Around 2004, about 60% of all Salvadorian exports traded with the United States, and the stability of the U.S. dollar supplanted the national currency, the Salvadoran Colón. Many found the complete reliance on the U.S. damaging to the Salvadoran values, and they have fought to create a more stable nation-state outside of American currencies.

Bitcoin presented a possible solution to El Salvador’s economic limitations between lower global GDPs and the need for U.S. Trade and currency support. Bitcoin will join the USD as a reserve currency, slowly relieving El Salvador’s need for capital in U.S. Dollars.

Why Bitcoin ATMs?

For the rest of the world, the disruptive nature of Bitcoin and its ability to support El Salvador’s economy provide continued proof of the value of cryptocurrencies. Other countries have followed El Salvador’s example:

  • Brazil: The Brazilian government accepted bill 2.303/15, initiating a vote about the status of Bitcoin within the country. While Bitcoin did not obtain legal status, Brazil defined it as a virtual asset, allowing Brazilians to pay for digital currencies with crypto coins (similar to how airline miles work for retail purchases).
  • Panama: Congressman Gabriel Silva announced Crypto Law, a bill designed to make Bitcoin legal tender in the footsteps of El Salvador.
  • Paraguay: Carlitos Rejala, a member of the Chamber of Deputies, announced he would run for president on a political platform that would make Bitcoin Paraguay’s official currency.
  • Ukraine: Ukraine passed a draft law that will legalize cryptocurrencies after the El Salvadoran bill came into effect. The country even has plans to start building cryptocurrency mining rigs.

Even the U.S. Federal Reserve has plans on creating a government-backed cryptocurrency. The infrastructure for Bitcoin and Bitcoin ATMs is growing amidst governmental acceptance.

The Critical Piece of the Digital Infrastructure is Bitcoin ATMs.

Cryptocurrency kiosks are the gateway between the consumer and a money transaction, allowing for the convenient use of a digital token. That access leads to widespread adoption, a fundamental tenet in each government’s plan for financial inclusion.

Already, this has caused Athena Bitcoin to install close to 1500 Bitcoin ATMs (BTMs) at the request of President Nayib Bukele. The kiosks are non-technical entry points for average consumers, facilitating more robust spending and formalized saving. Having an easy and secure way for Salvadorans to buy, sell, and exchange Bitcoin will help boost free-market growth factors.

Undoubtedly, other Bitcoin-leaning nation-states will look to the pioneering efforts of El Salvador, and that offers an opportunity for Bitcoin ATM owners. Panama has only 21 placed BTMs, the entire country of Ukraine has 39, and Paraguay has one single kiosk. For Bitcoin ATM investors, global placements present potential returns.

Expect Bitcoin ATMs to continue their rapid installation worldwide as the consumer infrastructure plays its role in altering digital money and global financial access.

Learn more about our first-of-a-kind Bitcoin ATM Ownership Program to find out how you piggyback off our existing cryptocurrency kiosk infrastructure to enter this fast-growing Bitcoin customer market.

Top Cryptocurrency Regulations: What You Need to Know

With the popularity of Bitcoin skyrocketing, installations of cryptocurrency Bitcoin ATMs have followed suit, growing a staggering 80% in 2020 from 6373 units to a total of 13,955. Consumers want to buy, sell, and make payments with digital tokens for goods and services, and Bitcoin ATMs offer that convenience. A Bitcoin ATM’s peer-to-peer, borderless, and profitable transfer network has become attractive to entrepreneurs and investors who can meet the demand of digital money holders.

While Bitcoin ATMs offer you a unique business opportunity within the world of deregulated cryptocurrencies, there are several payment service regulations you must follow. So if you are about to become the proud owner of a cryptocurrency ATM, read this guide to make sure you are compliant in your jurisdiction, as it will help determine the success of your Bitcoin kiosk.

What is the problem with virtual currency regulations?

Even though Bitcoin is decentralized, cryptocurrency ATMs are considered payment services, which means they fall under several compliance laws at the state level. As the kiosk operator, it is your responsibility to comply with your state government’s specific rules. Different states have completely different legal viewpoints on digital money, tokens, or currencies; for example, most states now require a Money Transmitter License (MTL), while Montana does not. For many bitcoin operators, the various virtual currency regulations are very confusing.

Plus, the Federal government wants to maintain consumer privacy, reduce fraudulent situations, and limit money laundering (as they do with all standard payment services), which they accomplish with more regulations. The safety and security of each digital money transaction benefit us all, but it also means you need to obtain additional federal business licenses. Each new compliance law takes time and creates more expense for you, the ATM operator.

So, with confusing state laws, different regulations, and additional federal restrictions, what do Cryptocurrency ATM operators need to do or know to achieve regulatory compliance?

Your crash course in Cryptocurrency Regulators

Everybody, Meet FinCEN

  • The Financial Crimes and Enforcement Network (FinCEN) is a branch of the U.S. Treasury designed to safeguard against the illicit use of the financial system. It’s the regulatory body responsible for enforcing compliance laws; it also covers cryptocurrencies under the Bank Secrecy Act. FinCEN has no interest in regulating the movement of cryptocurrencies, but they are very invested in the legitimacy of each payment transaction and the accuracy of all record keeping. FinCEN helps reduce illegal money transfers by ensuring strong payment regulations, even via digital markets or cryptocurrency exchanges.
  • For Bitcoin ATM Operators, FinCEN is who you report to and from where you obtain your licenses. FinCEN considers you a financial transmitter or a Money Service Business (MSB), so you must have your own compliance controls, just like a bank. FinCEN Director Kenneth A. Blanco made that fact clear when commenting on the advent of blockchain: “We expect each financial institution to have appropriate controls in place based on the products or services it offers, consistent with the obligation to maintain a risk-based AML program.” You must register every two years with FinCEN for their database as you keep your machine compliant. Luckily, you can complete the registration with FinCEN online in about a half-hour!

AML, MTL, and MSB – What You Need to Know

There are three main compliance regulations that you need to know: a Money Service Business (MSB) registration, a Money Transmitter License (MTL), and an Anti-Money Laundering (AML) Policy.

  • MSB: Any person or business who exchanges money, whether it is a traveler’s check or a cryptocurrency, must register as a Money Service Business. When you get your license, it will outline for you the required records you must keep for each transaction, most of which involve identity verifications. For example, an MSB must report any large transactions (over 2000$) deemed suspicious (i.e., planned for illegal activities). You will receive your reporting details when you register.
  • AML Compliant Policy: You are required to create an Anti-Money Laundering Policy that follows a set of procedures that deter illegal activity. This includes filling out Suspicious Activity Reports (SAR) and adopting Know Your Customer (KYC) protocols that alert the proper regulatory bodies to potential money laundering. In effect, you enact due diligence on each customer who uses your ATM to minimize illegal activity. Not only is this good for the economy, but it protects your ATM and business.
  • Money Transmitter License: For most states, anyone who exchanges money must apply for an MTL in the state that they plan to do business. Each state fits within four categories of restrictiveness with virtual currency regulations, so what you need for your license may be different than someone else. For example, some states require surety bonds while others do not. The purpose of an MTL is to clarify best practices in regards to money transfers — this can help reduce fraud and incorrect transactions, especially as financial services move into digital channels.

So, What’s The Solution?

Even with all this information, there are still many internal controls, audit protection, and employee training that may be required in addition to the compliance articles outlined above. So what is the simplest way for ATM operators to stay compliant? We suggest you follow these steps:

  1. Register with FinCEN
  2. Register for your Money Service Business (MSB)
  3. Be sure to be AML compliant.
  4. Register for money transmitter license (MTL) and any other state business licenses.
  5. Find a legal partner that understands the jurisdiction where your Bitcoin ATM will be located.
  6. Find a crypto-friendly bank that is familiar with dealing with cryptocurrency businesses.
  7. Partner with a reputable ATM processing company.

An ATM processing partner can help you reach compliance with far less hassle. Most Bitcoin ATMs come with built-in KYC compliant hardware, and they also include software that handles much of the reporting and due diligence you need to satisfy most regulations. Plus, your Bitcoin ATM provider is an expert when it comes to regulatory compliance, and they can guide you through the entire process, ensuring that you obtain each license in good order.

If you need more information about Bitcoin ATM regulations, you can attend one of our ATM business courses, or you can always contact us here via our online contact forms to initiate an inquiry— we would be happy to help you with our Bitcoin ATM compliance needs!