German Financial Regulator Cracks Down on Illegal Bitcoin ATMs
2 min readGerman financial regulator has targeted Bitcoin ATMs in the country that have been operating illegally.
Germany’s financial regulator has come down hard on Bitcoin ATMs that are operating in the country without a license.
BaFin Clampdown on Unlicensed Bitcoin ATMs
According to a report by Handelsblatt, the German Federal Financial Supervisory Authority (BaFin) targeted operators of Bitcoin ATMs that were working in the country illegally. Only BTC machines with a BaFin license according to the German Banking Act can function in Germany.
The report further reveals that the operator of BTC ATMs under the name “Shitcoins Club” has come under the regulator’s sledgehammer. Back in March, BaFin ordered Adam Gramowski, manager of the Shitcoins Club Bitcoin ATMs to cease operations in Germany.
Shitcoins Club’s BATMs are scattered in different parts of Europe, including Spain, Italy, and Poland. According to the German financial watchdog at the time, Gramowski conducted proprietary trading commercially without permission, hence the closure.
While it seemed that Gramowski halted services in Germany, Handelsblatt noted that the operator resumed services in the country. Some of the BTC ATM kiosks are reportedly active in cities like Offenbach, in addition to 16 BATM kiosks functioning in Germany.
Meanwhile, other operators in the country appear to be cautious. One of the providers Ivan Mircetic said that BaFin’s latest regulations were still confusing and requirements were difficult for small-scale companies. Mircetic added that Bitcoin ATM operators in Germany dreaded a further crackdown of the sector.
The total number of Bitcoin machines in Germany according to CoinATMradar is 51, with Munich and Berlin having the highest number of installations. Globally, BTC ATMs are close to 9,000, with the United States controlling 75% of the market.
BATM Industry Could See Stringent Regulations
As reported by CryptoPotato in March, the German financial regulator classified cryptocurrency as a financial asset, following the Fifth Anti-Money Laundering Directive (5AMLD). Also, crypto custodians in the country must obtain a license from BaFin.
A report published by the crypto intelligence firm CipherTrace in June revealed crypto thefts, frauds, and hacks, summed up to $1.4 billion between January and May 2020. On the other hand, 88% of funds sent by U.S. Bitcoin ATM users went oversees.
Most of the funds were sent to “high-risk” crypto exchanges, the percentage of which recorded an “exponential growth, doubling every year since 2017.” CipherTrace’s report further stated that BATMs could come under regulators’ radar, indicating stricter regulatory measures for the sector.
