German Crypto Regulator BaFin Shuts Down Unauthorized Bitcoin ATMs

German Crypto Regulator BaFin Shuts Down Unauthorized Bitcoin ATMs

Germany’s Federal Financial Supervisory Authority (BaFin) has shut down unauthorized bitcoin ATMs in the country. Now that cryptocurrency is regulated under the German Banking Act, bitcoin ATM operators need to be authorized by BaFin. The regulator recently clarified what crypto service providers must do to continue their services.

Also read: 40 Banks in Germany Declare Intent to Offer Crypto Services Under New Law BaFin Axes Unauthorized Bitcoin ATMs

BaFin published on Wednesday a notice regarding its order issued on Feb. 26 to shut down KKT UG’s bitcoin ATM operations in the country. The notice states that BaFin ordered Berlin-based KKT UG and its manager Adam Gramowski of Torun, Poland, to immediately cease their cryptocurrency operations in Germany. BaFin wrote: On its website www.shitcoins.club, the company advertises in German its bitcoin machines for purchase and sale of cryptocurrencies. German crypto regulator BaFin has shut down all cryptocurrency ATMs operated by KKT UG under the brand name Shitcoins Club. Since cryptocurrencies are financial instruments regulated under the German Banking Act, service providers must obtain authorization from BaFin to conduct business.

The German financial authority elaborated that since cryptocurrencies are financial instruments pursuant to the German Banking Act (Kreditwesengesetz – KWG), the company is conducting proprietary trading on a commercial basis without the required authorization. “It is, therefore, conducting unauthorized business,” the regulator alleged. An example of a Shitcoins Club ATM which has a bold design that is hard to miss. Shitcoins Club’s ATMs

Shitcoins Club cryptocurrency ATMs can be found in shopping centers, self-service shops and other locations around Europe. The Polish company’s ATMs “feature bald and exciting design, which represents the true spirit of cryptocurrency. Their ATMs are not easily missed,” cryptocurrency ATM tracking website Coinatmradar describes, adding that the company operates two types of crypto ATMs.

“All of our ATMs are designed and built by our company. We are offering transactions in the following cryptocurrencies: bitcoin ethereum, litecoin and dash. You can purchase cryptos for EUR, USD, GBP, CHF in most of our ATMs. You can also use our webpage shitcoins.club to sell cryptos and pay out money at one of our ATMs using redeemable code,” the company’s website explains. Locations of all of the company’s cryptocurrency ATMs in Europe.

According to its website, the company operates ATMs in Great Britain, Poland, Italy, Romania, France, Spain, and the Netherlands. It also offers face to face buying and selling of cryptocurrencies.

Following BaFin’s order, the company’s crypto ATM listings for Germany on Coinatmradar display a warning that reads: “This bitcoin ATM is temporarily not working (since 4th of March 2020). Due to BaFin’s decision we are forced to close our ATMs for the time being. We will be back with our services as soon as possible.” The company recently installed some cryptocurrency ATMs in Germany, such as in Nürnberg on Jan. 22 and Hamburg on Dec. 7. A warning sign on the company’s listings of an ATM for Nürnberg, Germany. This crypto ATM was installed on Jan. 22.

According to Coinatmradar, there are currently 71 cryptocurrency ATMs in Germany, 13 of which are in Stuttgart, seven in Berlin, and six in Frankfurt. In addition, four cities have five crypto ATMs each: Cologne, Dusseldorf, Freiburg im Breisgau, and Munich. Worldwide, there are 7086 cryptocurrency ATMs, Coinatmradar shows. The website also allows users to search for a bitcoin ATM near them. New German Crypto Regulation

Germany’s amendment to the Fourth EU Money Laundering Directive entered into force on Jan. 1, effectively regulating the crypto industry. BaFin told news.Bitcoin.com that financial services companies as of that date must submit their intent to apply for a license by March 31 and complete a license application by Nov. 30. The length of time it takes for an applicant to be granted a license depends on the individual case.

More than 40 financial institutions in Germany have reportedly declared that they are interested in offering cryptocurrency custody services under the new German law. BaFin recently further clarified the regulation. German banks are also struggling to cope with the negative interest rate policy maintained by the European Central Bank (ECB). At least 41 banks in the country are now charging their customers negative interest rates and the number is rising.

What do you think of the German regulator shutting down unauthorized bitcoin ATMs? Let us know in the comments section below.

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Images courtesy of Shutterstock, BaFin, Shitcoins Club, and Coinatmradar.com.

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A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. Please enable JavaScript to view the comments powered by Disqus.