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.
The first thing you need to do when starting your own Bitcoin ATM business is to handle compliance. You need a robust and professional AML KYC policy along with a compliance officer who knows what he’s doing. After that, you need to register with FinCEN as a money service business. If you don’t do these things you will have a very bad time claims Corey. There are examples of people who were acting as Money Service but were not registered and now are serving prison time for money laundering. So he strongly advises abiding by all the rules and regulations.
Apart from a good compliance officer, you will need a strong legal representation. So, make sure to find good lawyers also.
Machines, Locations, and other expenses
As far as machines go, Corey assures us that you cannot go wrong with General Bytes. He had experience with other manufacturers but as far as the functionality goes nobody can touch them. If you take into account the price, the software, and the customer service, you cannot find anyone better than them.
After you get your machines, you need to put them at good locations of course, which generates a lot of associated expenses. First of all, you need to pay rent to the store owner, after which you need to invest in marketing. The most important thing here is to list the machines on websites such as coinatmradar.com.
The liquidity is not easy to maintain, and at the same time, it is one of the most important things that you need to take care of. To make sure that your machines always have enough crypto to trade. Bitcoin isn’t free and it’s not easy to acquire, especially in large amounts. So, you either need to connect with a trading desk or an exchange or if you know any other way to get it, but the most important thing is that you never run out of Bitcoin.
Customer service is another thing you definitely need to establish. Especially having in mind that a lot of people are still not properly introduced to the concept of Bitcoin ATMs. Good customer service could really motivate those people to use your machines. Corey says that he is doing his own customer service but strongly advises against that saying that he is looking to hire a customer service rep to do the job for him.
Last but not the least, is that you need to organize an armored car pickup because the banks don’t want you touching the money. So, you need to do this if you want to work with a bank which is something that you need to do.
If you want to get into the Bitcoin ATM business, you need to understand that the banks are reluctant to work with crypto businesses. Maybe even more than the marijuana business. The compliance and framework are simply scary and not all of them are ready to take the risk.
Most of them say to come back to when you get to a million a month in transactions, which is a paradox. How can you get there without a bank account? But not all banks are enemies says, Corey. When you come across a bank that’s actually willing to work with you, you should do everything you can to maintain a good relationship.
TheCoinBros are working with Bankline. It is a service that helps you get everything prepared and then present you to one of their banking partners. Corey speaks very highly about them, saying that they bend over backward to make everything work. Having in mind that the Bitcoin ATM business requires a very specific account, that makes their services even more valuable. Since Bankline is not a local service, he advises crypto entrepreneurs to work with them, stating that they are very specific on the way that they want things handled, but they will do everything they can to help you.
Expanding the business
The Expanding can really go in two ways. Either you invest your profits in one machine at a time. In other words, when a machine pays for itself you go and buy another. Or you cooperate with an investor and add more machines at once. Corey is not into working with investors because he doesn’t really like to split the profits, and he also likes to have everything in his own hands.
So it is really just a matter of how much money you are willing to invest in the machines which really are expensive. Another thing you should consider is to find good locations beforehand so you can get the machines going as soon as you get them.
The final advice that Corey shared, is that if you are thinking to get into the Crypto ATM business, you need to have a lot of courage and to get used to rejection. You have to turn the rejection into motivation because this business is very unique and hard. After you gather up the courage, you can start to work on compliance and banking first of all. And later finding the most suitable manufacturer and locations for your machines.