Germany’s BaFin Mandates Licensing for Crypto ATMs

Germany’s BaFin Mandates Licensing for Crypto ATMs

September 8, 2020

Germany’s Federal Financial Supervisory Authority, popularly known as BaFin, has mandated its permission over the installation of any new cryptocurrency automated teller machines (ATMs). The provisions were made under the German Banking Act. 

“Proprietary trading is a financial service and financial commission business is a banking business, for which prior approval from BaFin is required,” a translated version of the announcement stated.

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Earlier this year, the German regulator officially classified cryptocurrencies as financial instruments, and it is now slowly tightening regulations across various arms of the crypto spectrum.

BaFin also mandated licensing of all cryptocurrency custodian services under its regulatory framework that prompted dozens of German banks to approach the approval.

Though cryptocurrency ATMs hardly become mainstream, many of these machines were installed across Canada, the United States, and Europe. According to Coinatmradar.com, there are 28 cryptocurrency ATMs are installed across the top German cities. Along with buying and selling Bitcoins, many of these ATMs also offer services with other cryptocurrencies, including Dash, Litecoin, and Ether.

The new order also mandates all these existing ATMs to seek regulatory approval.

Strict actions against the unauthorized crypto ATMs

“Those who set up such crypto machines that do not have permission from BaFin are acting without permission and are thus also liable to prosecution,” the financial market regulator added.

The actions against the unauthorized operations may also include confiscation of the machines and sealing of the business premises, BaFin warned.

The announcement also warned actions against the service providers of these unauthorized ATMs and made them complicit to the illegal operations, asking them to review the BaFin license before offering any kind of service or infrastructure.

“Persons or companies who make the premises or power or internet connections available to such crypto-machine operators are involved in their unauthorized transactions and are therefore themselves possible addressees of administrative measures,” BaFin said.

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