Germany’s Crackdown on Unlicensed Crypto ATMs: Regulator Seizes $28 Million

In a nationwide operation, Germany’s financial regulator BaFin has taken action against unlicensed cryptocurrency ATMs, seizing 13 machines and confiscating nearly 250,000 euros in cash. This move is part of the regulator’s efforts to maintain the integrity of the German financial system and protect consumers from the risks associated with unregulated crypto trading.

The operation, which involved collaboration with law enforcement agencies, the Bundesbank, and the Federal Criminal Police Office, targeted a total of 35 locations across the country. The seized ATMs were primarily used for exchanging euros into cryptocurrencies and vice versa, a business that requires a license from BaFin under the German Banking Act.

According to BaFin, the lack of proper licensing and compliance with know-your-customer (KYC) and anti-money laundering (AML) regulations posed significant risks, including the potential for money laundering. Illegal operators of these ATMs can face up to five years in prison.

The crackdown on unlicensed crypto ATMs reflects a broader trend of increased scrutiny on the cryptocurrency industry by regulators worldwide. While cryptocurrencies offer potential benefits, such as financial inclusion and technological innovation, they also present challenges for authorities attempting to maintain oversight and prevent illicit activities.

In the US, for example, operators of crypto ATMs are required to register with the Treasury Department’s FinCEN and comply with state-level regulations. Failure to do so can result in prison sentences of up to 30 years.

The seizure of 13 crypto ATMs and the confiscation of a quarter of a million euros in Germany sends a clear message that the authorities are committed to ensuring the integrity of the financial system and protecting consumers from the risks associated with unregulated cryptocurrency activities.