Why Compliance Is the Biggest Team at Bitcoin ATM Startup Coinsource
Coinsource, a well-known bitcoin ATM company, purchased a booth at this year’s Consumer Electronics Show (CES) in Las Vegas. Given increased interest from the IRS in bitcoin ATMs, we were especially curious about how users reacted when Coinsource increased its know-your-customer (KYC) requirements.
“Our compliance department is actually the largest department in our entire company,” Coinsource’s Derek Muhney told CoinDesk in the video above. Money-laundering concerns have long dogged the bitcoin ATM sector.
Muhney said Coinsource moved to require KYC of everyone two years ago, though the company had always required it for transactions over $800.
“We received little to no customer feedback [about the change],” Muhney said.
At the show, Coinsource was demoing one of its buy-only machines, where a user can use cash to buy bitcoin. The company also has machines that will dispense cash in exchange for bitcoin.
Coinsource ATMs take an 11 percent fee on any transaction. So that consumers know what they’re getting, Muhney said the company doesn’t try to make money off a spread, or the difference between the prices at which Coinsource buys and sells BTC. (It’s a transparency-boosting move that Square’s Cash App recently undertook as well.)
Coinsource is currently only offering bitcoin but Muhney said its software has been built to handle more cryptocurrencies. The company currently has more than 400 bitcoin ATMs deployed in 42 states.
“We really wanted to show off the fact that bitcoin adoption is on the rise,” Muhney said of his company’s presence at CES 2020. “The footprint of bitcoin ATMs on a global scale just continues to grow and grow.”
As for reactions from people on the floor, Muhney said that booth visitors were “excited to see that it’s become so mainstream that they’re seeing it at the Consumer Electronics Show.”
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