Germany Cracks Down on Crypto ATMs: 13 Seized for Non-Compliance

August 21, 2024 05:07 PM AEST | By Team Kalkine Media

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Germany Cracks Down on Crypto ATMs: 13 Seized for Non-Compliance — Image source: Shutterstock

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Germany’s Federal Financial Supervisory Authority (BaFin) has intensified its crackdown on crypto ATMs, leading to the seizure of 13 machines from 35 locations as of August 20. This enforcement action, executed in collaboration with the Federal Criminal Police Office, local law enforcement agencies, and the Bundesbank, targets operators who allegedly installed these ATMs without proper registration under Section 32 of the Banking Act. According to BaFin, the operation of these machines, which facilitate the exchange of euros for cryptocurrencies or vice versa, constitutes a violation of the Banking Act.

The German regulator's concerns extend beyond regulatory compliance. BaFin has also highlighted the potential for crypto ATMs to become hubs of criminal activity if operators do not implement effective Know Your Customer (KYC) controls for transactions exceeding 10,000 euros. This additional scrutiny reflects a broader effort to mitigate the risks associated with cryptocurrency transactions and ensure that operators adhere to legal requirements.

Globally, the landscape for crypto ATMs has been shifting. While the number of [Bitcoin] ATMs had been approaching record highs in 2024, the upward trend faced interruptions in July, when 440 machines were removed, followed by a further reduction of 173 by August 1. Despite this decline, recent data from Coin ATM Radar indicates a recovery, with an additional 266 ATMs installed since early August.

The reduction in Bitcoin ATMs earlier in the year can be partially attributed to regulatory actions in the United States. Notably, Bitcoin of America faced legal challenges and was compelled to shut down operations in Connecticut. This action followed charges from the state’s Department of Banking for operating without a license and complaints from customers who reported substantial financial losses. As part of the settlement, Bitcoin of America agreed to pay compensation to affected individuals.

Overall, the regulatory environment for crypto ATMs is evolving, with increased scrutiny and enforcement actions reflecting broader concerns about compliance and security in the cryptocurrency space.

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