German Watchdog Clarifies Requirements for Bitcoin ATMs

The Federal Financial Supervisory Authority (BaFin) has announced that all Bitcoin ATM providers are obliged to receive an approval from the regulator to operate in Germany.

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The regulator says that the public installation of ATMs at which cryptocurrencies like bitcoin (EXANTE: Bitcoin), DASH (DASH), litecoin (LTC), ether (ETH) can be sold or purchased, can be carried out only after the watchdog’s approval.

Proprietary trading is a financial service and financial commission business is a banking business, which requires prior approval from BaFin in accordance with Section 32 (1) KWG, BaFin said in an official press release.

Those who set up such crypto ATMs without the appropriate permission from BaFin are acting illegally and thereby liable to prosecution in accordance with German law.

If necessary, BaFin enforces its measures independently of the law enforcement authorities by means of administrative coercion.

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Individuals or companies who make the premises or power or internet connections available to crypto ATMs are involved in their unauthorized transactions and are therefore themselves possible addressees of administrative measures.

In these cases, the regulators claims, landlords are obliged to make sure of the BaFin license as a mere business registration is not sufficient.

In March, BaFin issued a guidance in which clarified the status of digital assets. According to the regulator’s definition, cryptocurrencies and other digital assets are a “digital embodiment of value.”

The definition of digital currencies is consistent with the definitions of other regulators, including the Financial Action Task Force on Money Laundering (FATF)

In August, Hong Kong police detained three men, aged 26 to 55, who are allegedly got unauthorized access to access bitcoin ATMs.

Having taken advantage of the so-called “loopholes” in the ATM, the bad actors managed to withdraw approximately $30,000 in 11 transactions without authorizations from six separate bitcoin ATMs.

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