UPDATE (7th November 12:10 GMT): Robocoin ATM operator Jonathan James Harrison has issued a public statement encouraging other operators to boycott the company by switching their machines to alternative open-source software.

His statement reads: “This is a call for help to the open source and bitcoin community to come together and make these bitcoin ATMs what they should be. Free and open … I suggest we all turn off our machines together to show we won’t be bullied into his new system.”

It can be read in full here.

Robocoin has announced that it will now require all of its bitcoin ATM operators to collect customer information in an effort to comply with know-your-customer (KYC) regulations.

The Las Vegas-based company reported the decision was made under the direction of its legal team, which advised the startup that, as a registered money services business (MSB), it could no longer process anonymous financial transactions.

In its full remarks, Robocoin asserted that while it had hoped to allow its ATM operators to continue to choose whether to meet KYC standards, recent actions from the US Financial Crimes Enforcement Network (FinCEN), along with the shutdown of allegedly non-compliant ATMs, signal that bitcoin companies that fail to adhere to regulations will face repercussions.

Speaking to CoinDesk, Robocoin CEO Jordan Kelley framed the announcement as a necessity should the startup want to achieve its goal of bringing bitcoin ATMs to the wider global market. In this light, he argued, the ideological preferences of individual operators shouldn’t outweigh the good that the company could achieve by reaching the global underbanked.

When asked whether he believed there would be customer backlash over the decision, Kelley sought to keep the company’s larger goals at the forefront.

He said:

“Let’s ask this question. How many bitcoin ATMs do we want in the world? Do we want 30? Do we want 100? Do we want 200? Or do we want 1,000, 10,000, 100,000? Our logic is it’s all about providing scalability and consistency to the customer. Whether or not we wind up having to part ways with a few guys that lack alignment with us, that’s just the way it goes.”

Kelley added that Robocoin would help any operator unwilling to meet the company’s directive, and would act as broker to resell their machines.

The news notably comes on the heels of a wave of community backlash against Robocoin for alleged difficulties it caused operators in connection with the delivery of its units.

No links to money laundering

As part of the decision, Robocoin operators will need to upgrade to the Robocoin 2.0 platform, which mandates that bitcoin ATM customers use the company’s new proprietary wallet.

At least one Robocoin operator, Jonathan James Harrison, has taken issue with the change, reporting that he will resist the upgrade to the company’s new platform. Harrison aims to hold a launch party tomorrow for his latest bitcoin ATM, whether the machine is operational with its existing Robocoin 1.0 software or not.

Further, he has suggested he will attempt to galvanize sentiment against the company should it not continue support for its Robocoin 1.0 platform, which he alleges the company had previously suggested he could keep.

“Friday will be a very bad PR day for you,” he wrote in an email to Robocoin.

Kelley stressed in an interview, however, that he doesn’t see the strategy shift as a contradiction or redefinition of any understandings between Robocoin and its operators.

Rather, he said Robocoin’s relationship with ATM owners remains unchanged. Operators, he said, continue to be in the business of buying cash with bitcoin and selling bitcoin for cash, and that pursuant to this goal, all parties in the transaction should resist becoming enablers of money laundering.

“We do not want to be associated with any kind of money laundering,” Kelley said. “Any machine that doesn’t collect customer ID, it gives the money launderer the ability to convert cash that was earned illicitly into bitcoin and to do it without any kind of customer information. We cannot be a part of that; we can’t be associated with it.”

Eye on larger goals

To Kelley, the decision was a tough, but necessary, move that he feels will send a positive signal to the wider public about how his company is looking to extend the benefits of bitcoin more broadly.

“We’re listening to the world,” Kelley said. “The world says ‘we demand more access to bitcoin’. We want to provide that, but we cannot provide that with a few machines with our brand on them that are engaging in non-compliant activity.”

Kelley framed the Robocoin 2.0 upgrade as a way to better bring bitcoin to the world. For example, he cited the improved ease of use of the platform compared to the original iteration.

“With our new software, customers walk up to the machine for the first time, put in cash, get a bitcoin wallet made right there, and then have the ability to send that bitcoin to another person anywhere else in the world, or send it to their own wallet,” Kelley said, emphasizing how this improves on the company’s original approach.

Harrison, however, alleges that he felt Robocoin’s 2.0 software had so far underdelivered, a claim that Kelley also countered by taking a long-term view on his product.

“That’s the beauty of developing on a new platform, at launch it may have a few little glitches the same way you might have with a new Apple update, but over time it gets stable, it improves, we get feedback,” he said.

Courting business partnerships

In statements, the company sought to portray the step as one that is vital to the company’s continued operation, and therefore in the best interest of its operators and customers.

“There are some guys in some markets who want to be the only one and they want to own that machine,” he said. “Our logic is that we want a machine on every corner to make sure we can deliver on the promise of bitcoin.”

Kelley went on to state the he feels the change is necessary should Robocoin seek to appeal to new business partners in accordance with its goals, just as Coinbase and other companies in the ecosystem have done in the past.

“Big companies do not want to do business with guys who have machines that are non-compliant,” Kelley said.

The statements concluded by noting how Robocoin has evolved in the year since it launched, reading:

“Bitcoin and the bitcoin ATM industry have matured. As the legal landscape becomes clearer, Robocoin evolves and so do the requirements with which we must comply.”

Images via Robocoin; Shutterstock