Shopkeepers described to the Mail how teenagers deposit wads of £50 notes

Up to four in five of those using the ATMs are suspected drug dealers, one said

Criminals can launder money – and bypass bank checks – by putting high-denomination notes into the machines to convert them into Bitcoin

The extent to which Britain’s fast-growing network of Bitcoin cash machines is being exploited by drug gangs can be revealed today.

Shopkeepers have described to the Mail how teenagers ‘reeking of drugs’ deposit wads of £50 notes into their digital currency terminals.

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Up to four in five of those using the new ATMs are suspected drug dealers, one said.

Criminals can launder money – and bypass bank checks – by putting high-denomination notes into the machines to convert them into Bitcoin.

It can then be transferred across borders and withdrawn in any currency, and is hard to trace.

A day after Scotland Yard called for a crackdown, warning that criminal gangs are using the machines to launder their dirty cash, a Mail investigation found:

One shop that agreed to close to allow a customer to pay in £14,000;

A gaming bar where staff say up to 60 per cent of ATM users are drug dealers;

Shopkeepers boasting the machines are easy money – they get a fee of up to £1,200 a month, or commission on each deposit.

A fast-growing web of Bitcoin ATMs, owned by a range of operators, has sprung up across the UK from Penzance to Glasgow.

There are now 98, with locations including a cannabis shop in Croydon, a vaping store in Tunbridge Wells, a fish and chip shop in Brighton and a food store in Derby.

The machines, connected to a Bitcoin exchange, are also used by speculators investing in the cryptocurrency, which has increased in value more than tenfold in a year.

Mahalingam Krishna, who owns G7 newsagents in West Norwood, South London said: ‘It’s easy money for us. We get £200 a month just to have it sitting in the shop.

'We have had one since May and we get all sorts. Boys wearing hoodies, kids aged 17 or 18. They reek of drugs.

'I don’t know if they are criminals, they don’t like me to see what they are doing.’

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Staff at Loading Bar in Dalston, East London, estimate that at least 60 per cent who use its Bitcoin ATM, installed six months ago, are drug dealers.

‘At first it was about 80 per cent,’ said a male employee who did not want to be named. The guys who are druggies will bring in massive amounts, a wad of £50 notes.’

At a corner shop in Derby, ATM customers yesterday included a man who had travelled from Nottingham and another, in his 20s, who bought three Bitcoin last year for around £350 – they are now worth more than £24,000.

Mahalingam Krishna, who owns G7 newsagents in West Norwood, South London said: ‘It’s easy money for us. We get £200 a month just to have it sitting in the shop'

Staff said the users were ‘mainly geeks’ and there are precautions to stop money laundering.

Anyone wanting to buy Bitcoin worth more than £250 in a single transaction has to register using their fingerprints and two forms of ID.

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Detectives from Scotland Yard’s elite Organised Crime Command say Bitcoin is one of the biggest emerging obstacles to tackling major gangs.

Julian Dixon, CEO of Fortytwo Data, specialists in combating money laundering, said: ‘The UK is several steps behind the criminals and playing catch-up. Scare stories about the use of Bitcoin on the Dark Web have been common since its inception. Why has is taken so long for the authorities to decide to act?’

Bitcoin emerged in the aftermath of the 2008 financial crisis.

It is unregulated, hard to trace and exists only in cyberspace in the form of a numerical code.

It can be exchanged anonymously with anyone in the world at the click of a mouse.

The Bitcoin craze means its value has soared from around £750 at the start of the year to more than £8,200, making the currency worth £140billion – almost as much as the Coca-Cola company.

But as it is not tied to any assets in the real world and the value is driven purely by demand, experts fear the Bitcoin bubble will burst.

'It's not unusual for them to put in £10,000'

Cannabis shop manager Tom Barber is happy to close his doors when customers ask for privacy to deposit huge bundles of cash into his Bitcoin ATM.

His Skunk House store on Croydon High Street sells a range of drug paraphernalia – but the most popular purchase is Bitcoin.

‘It’s been great for business,’ he said. ‘We get ten to 20 people using the ATM a day.

‘It’s not unusual for people to put in £10,000 in a day. We have had everyone from businessmen trying to hide from the taxman, to college students, to immigrants sending money home.

‘I’ve had to close the shop for half an hour and get the machine emptied and filled again so that one guy could deposit £14,000 in one go.

Booming trade: The Vapour Trail in Tunbridge Wells has one of the ATMs

Skunk House cannabis shop in Croydon is another location with a Bitcoin ATM

‘There is a £500 limit per transaction on the machine, but the number of transactions you can do a day is limitless.

‘You don’t get to hear what the money is for, but it would not surprise me if drug dealers were using it.

‘There was one drug dealer I heard that was about to get caught so he put everything he had into Bitcoin. When he came out of prison, the value had gone up so much he bought a house.’

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He said he believed Bitcoin was used to make purchases on the Dark Web – the secret part of the internet frequented by, among others, pornographers, criminals and terrorists.

Daniel Jenkinson, who owns The Vapour Trail in Tunbridge Wells, Kent, has seen more than £100,000 deposited at his vape store’s Bitcoin ATM in the past three months.

He said 90 per cent of users are either business people or curious investors. His machine is provided by Alpha Vend, which pays him 30 per cent of the commission it makes on every deposit.

Mr Jenkinson, 28, insisted he had seen no evidence of criminals using his ATMs to launder money.