- BaFin has initiated action, through a notification issued on February 26 to shut down unauthorized Bitcoin ATMs.
- The provisions of these statutes require such ATM operators to be authorized, to continue with the crypto-services, by BaFin.
- According to the order issued by BaFin, the company has shut down its operations across the country since the 4the of March 2020.
BaFin, the Federal Financial Supervisory Authority of Germany, has initiated action, through a notification issued on February 26, to shut down unauthorized Bitcoin ATMs in the country. This was the result of Germany’s regulation of the cryptocurrency sector under the German Banking Act.
The provisions of these statutes require such ATM operators to be authorized, to continue with the crypto-services, by BaFin. The description of the shutdown order specifies Berlin-based KKT UG and its manager Adam Gramowski of Torun, Poland to stop their crypto-transaction-services immediately. KKT UG operated these ATM’s under the brand name Shitcoins Club.
The fact that assets like cryptocurrencies are recognized as financial instruments under the German Banking Act necessitates the company in issue to conduct proprietary trading after receiving the appropriate authorization to carry on the same on a commercial basis.
The regulators commented that any company conducting the above-mentioned transactions without the proper authorities should be deemed to have conducted an unauthorized business.
The ATM’s with the said brand name can be located in popular and frequently visited corners of Europe, which include shopping centers, self-service shops, and other populated locations. According to website reports, the company features crypto ATMs with unique designs, that are classified into two variants.
The ATM’s, which provides transaction platforms for facilitating cryptocurrencies like bitcoin, ethereum, litecoin, and dash, are indigenously designed by the company. Such cryptos can be purchased using currencies like EUR, USD, GBP, CHF in all the ATM’s. Apart from that, such transactions can be implemented in their online platform named shitcoins.club using a redeemable code.
Apart from Europe, the company operates ATMs and provides face to face buying and selling of cryptocurrencies in Spain, Great Britain, Romania, Poland, Italy, France, and the Netherlands according to its online website information.
According to the order issued by BaFin, the company has shut down its operations across the country since the 4the of March 2020. This includes the newly installed ones in locations like Nürnberg and Hamburg on January 22 and on December 7 respectively. However, the company has promised its users that it will resume its services as soon as possible.
According to recent reports, the company currently holds 71 cryptocurrency ATMs in Germany, 13 of which are in Stuttgart, seven in Berlin, and six in Frankfurt. Apart from that, adding on to the above figures, four cities have five crypto ATMs each. The above mentioned ATM’s belong to the pool of 7086 cryptocurrency ATM’s across the globe.
Nuances of the Amendment
The recent amendment to the Fourth EU Money Laundering Directive that caused the present event took force on January 1, 2020. The object of the amendment was to create a regulatory framework to monitor crypto-activities in the country.
As an immediate measure to attend the same, BaFin has required such crypto-financial-platforms to apply for a license within March 31 acquire the same by November 30.
On a brighter side, more than 40 financial institutions in Germany have reportedly stated that they are interested in providing cryptocurrency custody services under the new German law.
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