▋Not tech-obsessed San Francisco or New York — has claimed the title of first city to install an operational Bitcoin vending machine in the U.S.
The machine is up and running, as of Tuesday, at a cigar shop called Imbibe near the University of New Mexico, according to an announcement by Lamassu, the machine’s manufacturer. The vending machine allows people to insert cash — in exchange, it gives a digital stash of the increasingly popular cryptocurrency.
This is my current contribution to advancing Bitcoin into the mainstream,” Eric Stromberg, owner of the Albuquerque Bitcoin vending machine, told Mashable. Though the machines have been hailed as Bitcoin “ATMs,” Lamassu eschewed the term in favor of “vending machine” since the device does not function like a true ATM in that it doesn’t dispense cash.
A true Bitcoin ATM might not be far behind, though. Robocoin, a Las Vegas-based company that installed its first Bitcoin ATM in Vancouver last year, has said it intends to install the first U.S. Bitcoin ATMs later this month. The Robocoin machines allow for both cash-to-Bitcoin and Bitcoin-to-cash transactions. Prospective Bitcoin vending machine operators have been trying to bring the devices to other cities, such as New York and San Francisco, for some time, but they’ve faced regulatory hurdles.
“I can’t really afford to hire a team of lawyers to walk me through the legal issues involved with this machine,” Cole Albon told Mashable. “I do not wish to pick a fight with any government official, but I feel that rather than throw people in jail for money laundering, the government should offer up some resources into making [anti-money laundering] compliance easier for the little guy.”
Albon, a San Francisco resident, has been in possession of a Lamassu vending machine for about a month, but he has not been able to deploy it thus far. He said California requires a $250,000 bond to operate the machine, in addition to a prohibitively strict anti-money laundering program. Albon suggested more relaxed regulation in New Mexico allowed it to become host the country’s first Bitcoin vending machine. Stromberg, who initially hoped to place his machine in San Francisco, also said that the regulatory climate in New Mexico made it a better choice than California.
Enchanted Bitcoins, Stromberg’s company, said it believes it has cleared these hurdles by establishing a full anti-money laundering program and registered as a money services business with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
Those safeguards require Enchanted Bitcoins to monitor its customer base for suspicious activity. Any violation or negligence could result in serious problems. The Bitcoin community learned that lesson the hard way last month, when one of its favorite sons was arrested for such violations. Federal officials charged Charlie Shrem, co-founder and CEO of exchange platform BitInstant, with conspiring to commit money laundering and failing to report suspicious activity. Prosecutors say Shrem knowingly conducted and even facilitated business with a shadowy figure who was funneling bitcoins to users of Silk Road, the online black market for drugs.
“I take my responsibility very seriously to manage this risk aggressively,” Stromberg said. Aside from Bitcoin’s reputation for use in illicit transactions, users of the shiny new Albuquerque machine should also beware because the price of Bitcoin has been extremely volatile during the past four months. It climbed to all-time highs in January before nosediving due to a system-wide glitches last week.