Category Archives: Bitcoin ATM Regulation

Buy Bitcoins at Bitcoin ATMs

Ben Weiss from CoinFlip about the bitcoin ATM operator business

Ben Weiss is a chief operating officer of CoinFlip, an operator that has over 1100 machines in 43 different states. He was first introduced to Bitcoin when he was at school. He didn’t have a tech background but he was drawn by the asymmetric payoff of the cryptocurrency, in a way that you can invest a little money which you can afford to lose, but on the other hand, the potential profit is enormous. He realized that it’s definitely a bigger risk not to have bitcoin. After a while, he got deeper into the tech world and recognized that Bitcoin is going to change finance and banking. So, he decided to get on the crypto train early.

Why Bitcoin ATMs?

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Neil Bergquist, the CEO of Coinme talking about Bitcoin ATMs

Neil Bergquist is a co-founder and CEO of Coinme, a company that’s partnering with Coinstar and MoneyGram to form the largest network of Bitcoin kiosks in the world with 20.000 locations. Its mission is to increase global financial equity by making cryptocurrency more accessible to everyone and making the buying selling and managing of cryptocurrencies safe, easy, and efficient. In the above podcast, you can hear Neil’s insight on the Bitcoin ATM business and the importance of crypto accessibility.

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Bitcoin ATM Business Overview: Cory from TheCoinBros interviewed by Jerry V Hall

In this recent interview, you can hear more interesting advice from Cory, TheCoinBros CEO. A company that currently has 60 machines and is steadily expanding throughout the east and west coast. He will be sharing his thoughts and experiences about different aspects of the Bitcoin ATM business.

The challenges of starting a Bitcoin ATM business

Starting a Bitcoin ATM business at a time when there were only 90 machines in whole California was tough, says Cory. Of course, the biggest obstacle was the regulation. They needed to plow through so much to actually make it past that barrier where most people just give up.

Now they have an established AML KYC policy. As he claims, if you agree to be a money service business and a financial institution, you must agree to play ball. If you don’t you will definitely get caught and sanctioned. Cory added that their policy is not that complicated and they never use the customer information for anything. He actually says that the AML KYC policy is there to protect the customers from different scams because anytime there is any sort of money involved there will always be bad people to try and take advantage of others.

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Making Crypto Accessible to Everyone with Bitcoin ATMs

In the below video, you can hear an interview with Zach Harvey, the CEO of Lamassu, one of the biggest Bitcoin ATM Manufacturers on the market. He shared his thoughts about the cryptomarket and the way it is heading, as well as his insight into the Bitcoin ATM business, Specifically, what differs it from the exchanges and what is the worldwide coverage.

Interestingly, before becoming a successful crypto entrepreneur, Harvey owned a guitar store with his brother in Israel. As they were starting to adopt the libertarian philosophy at some point, and developing ideas about a decentralized marketplace, the concept of decentralized currency emerged naturally in their minds and was just an obvious next step. It took them some time to gain trust in Bitcoin, but after some persuasion from their libertarian friends, in 2011 they started offering to sell guitar gear for Bitcoin at their store. Of course, they were the first store in Israel to do so, and sure enough, nobody ever paid them in Bitcoin for anything at that time.

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Paul L – Cryptocurrency Entrepreneur – Bitcoin ATM Machines

In this video, MSCS media hosted Paul Leix. He is a partner in a Bitcoin ATM Operator called Digital Ventures Group. He talks about a lot of different crypto-related stuff, including the Bitcoin ATMs, the Operating business, compliance, predictions…etc.

Paul’s beginning was somehow interesting. He started trading Bitcoin back in 2013. after his then friend, and later partner persuaded him. For some time they traded at LocalBitcoins when they met an owner of Red Leaf Bitcoin ATM company and got an idea to go that path themselves. Have in mind that it was back in the day when Bitcoin ATMs were very rare. So, they went to the guy they know who owns a liquor store and installed a machine there on their own. The thing is that at the time they didn’t know how to get the compliance. The concept of crypto was new back then and they needed someone to do it for them. The first guy wrote a 2 pages long document and charged 900 bucks for it. Later on, they found the right guy who wrote them a complete book of policies and procedures which was the real deal. Of course, it also cost them a lot more, $15.000 to be specific.

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How to Start a Bitcoin ATM Business – TheCoinBros Use Case

In the following video, you can hear Corey from TheCoinBros talking about everything you need to know if you want to start your own Bitcoin ATM business. He discusses AML & KYC policies, creating a legal team, which machines to use, banking, ideal locations, and what it takes to sell store owners on adding a machine to their shop.

TheCoinBros started in 2019 after Corey parted ways with his partner. He wanted to do things his way so he bought thecoinbros.com domain and registered the LLC in 2017 and sat on it for 2 years while he meticulously planned his strategy. At the very beginning in 2019 they had only 4 machines but quickly rose to 15 within a couple of months. Now they have close to 60 machines with plans to constantly expand. As Corey says, the Bitcoin ATM business is very unique, and it is one thing to have 2 machines but it’s a completely different animal when you start scaling up. So he will share some advice on how to start.

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Starting a BTC ATM Business? Some Advice from Crypto Crow. Part 2.

In the second video of the Crypto Crow Bitcoin ATM Business series, you will find out more about banking, AML/KYC, Compliance, and FinCEN. Jason will also reveal some shady practices performed by Bitcoin ATM Operators which will trigger a discussion about business ethics.

The Hardware

After going through all of the options that we mentioned in the previous post, from General Bytes to Alibaba, he decided to buy the machines at BitAccess. The thing he liked the most is that they were very helpful from the start all the way up to the shipping of the machines.

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How Crypto ATM Operators Ensure Compliance – Accounting

In the United States, the IRS views cryptocurrency as a property (for businesses) [1]. This means all cryptocurrency related transactions must be tracked and the capital gain/loss accounted for. To ensure compliance and to prepare for any potential audits, transaction records should be kept for 7 years as recommended by the IRS, this means safeguarding 7 years worth of cryptocurrency transaction records for operators [2].

Below are some common taxable events operators may encounter:

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Bitcoin ATMs 7 years: from 0 to 10000

Bitcoin ATMs installations exceeded 10’000 locations across the globe. It took industry roughly 7 years to reach this point since the first permanent bitcoin ATM installation in the end of 2013 (there is still a bitcoin ATM at this location in Vancouver at Waves Coffee House). Looking back at traditional bank ATMs, it took banks 9 years to install 10’000 ATMs, so the pace of bitcoin ATM installations is quicker than for bank ATMs back in the 70-s.

Interesting fact: After the first 3.5 years there were 1000 active bitcoin ATMs in operation, over the next 3.5 years this figure has increased by 9000 ATMs more.

It is a large milestone and achievement for all involved companies and people. We would like to congratulate all members of the community, entrepreneurs involved in operation of ATMs and supply of hardware and software, companies that provide compliance and other complimentary services helping to grow the business. We use this milestone as a chance to look back and check how running bitcoin ATMs became a professional business and evolved over these years.

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CASH INTO CRYPTO – Bitcoin ATM’s and The Coin Bros

In this video, you will see the first part (out of two) of the interview with Cory from CoinBros. In this part, he will talk about the CoinBros as a company and explain how Bitcoin ATMs work.

After telling a story on how he started to gain interest in Bitcoin while he was a paramedic and finally started a Bitcoin ATM business in 2017, Cory was asked to explain how is cryptocurrency stored in the machine.

He explains that you can link the ATM directly to the exchange via API or you can use the cold storage wallet. Linking directly to an exchange is less risky because you buy or sell crypto live and that way you cannot become a victim of volatility. On the other hand, by storing the crypto in the wallet you can lose a lot of money if the price keeps going down like in 2018, or you can earn much more in an opposite scenario.

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