Starting a Bitcoin ATM Business is no easy feat. This article will help you understand the things you will likely have to do to launch a Bitcoin ATM Business in the United States.
As a Cryptocurrency Youtuber since 2017, I’ve learned a great deal about the various types of operations in the field. My latest venture as been in the Bitcoin/Crypto ATM, or BTM industry.
I set out to launch a small fleet of BTM’s in my area not having much of a clue as to just how long and convoluted the process would be. I may as well have started my own bank.
#1.Bitcoin ATM Machines: I needed to figure out where I was going to purchase my machines. I looked at and spoke with just about all of the major players in the market from General Bytes, Lamasu, BitAccess and others. I also looked at just buying them direct from China though the problem there was in that they only sell the hardware, not the software that they operate on. That took me back to square one because the companies they show as selling the software, no longer sell the software because they want you to buy their machines which they double the cost of which now contain the software and they generally take a percentage of the transaction volume from the machines. I found this fine considering the need for ongoing support anyway so they have a vested interest in making sure you stay up and running with little downtime. After everything, I ended up going with BitAccess.com for my machine and they have proven to be very helpful thus far. My cost ended up around $6,000 per machine x4 and about $9,000 to have them shipped. Not cheap.
#2. Banking – Plain and simple, you aren’t going to get a bank account for your BTM business. There is a company called BankLine that will work with you once you have $500,000 a month in volume, but outside of that, they work with a new service specifically for new operators. I will update this with more information on that soon.
#3. AML/KYC Policies and Procedures – In order to get any banking services from ANYONE, you have to fulfill some things first. One of which is getting a complete AML/KYC Policy package drafted up by an attorney and it needs to be relevant to the states you plan to operate in. After speaking with so many people https://bitaml.com was the most recommended by everyone as being the best in the business. The cost was $4,500 to complete this.
#4. Compliance Officer: In addition to the Policies and such, I needed a compliance officer. I happened to know a good one from being on Youtube as he would send me tidbits of help from time to time. Your compliance officer will oversea your operation, flag accounts in the system and basically make sure you stay legal and compliant day to day. Todd E. Maher, CAMS, CBP, CTCE
President, BitSource AML Solutions www.bitsourceaml.com Expect to pay $500 per month minimum and $100 per month per machine roughly and that is IF he accepts working with you.
#5. Register with FinCEN – Just have to do it. Pretty simple though. FinCen Registration
Once you get all of that completed, you have to find locations for your machines. This is where I’ve noticed some shady stuff going on. Maybe it’s not as shady as I think, but generally speaking, it just feels shady. Let me know in the comments what you think.
In speaking with location owners, some may already have BTM’s from other companies. However, I asked one how happy he was with his deal and he said he loved it, he was make $150 a month in rent plus 4% on all transactions. Woah! How was this possible! So I looked up the machine and found the company. I saw they were only advertising a 6% fee on their BTM’s and I’m thinking, there is no way. Either the owner of the location was mistaken or something was fishy. I then discovered that while they are advertising a 6% fee to beat the competition, they are actually selling the Bitcoin at much higher prices than the market price! If Bitcoin is $40,000 on the market, their price is $50,000 plus 6% transaction fee!
Now there are two sides to this. One, it’s a shady way to capitalize on the ignorance of the retail market while appearing to be the cheapest BTM in the area. It also protects the BTM owner from the crazy price fluctuations of Bitcoin. What I mean is, lets say you you sell $10,000 of BTM this week and you have to send the funds to the bank to then replenish the BTC sold. That could take 24 to 36 hours generally speaking. We’ve seen BTC prices rise by $10,000 in a day. So, I get it, to a degree. The opposite is also true. It could drop quite a bit in a day and you’re buying back the BTC at a much cheaper price. So is it shady to cover your potential losses at the expense of the BTC buyers as a form of just doing business or should the ebbs and flows average themselves out over time? I can’t help but feel like this is an ethical/moral issue to some degree and I’m not sure what to do.
Once you have your locations setup and ready to go, you’ll want to add them to CoinATMRadar.com and create a Google My Business Page for each of them so they show up in local Google Searches.