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Germany’s Federal Financial Supervisory Authority, known by its abbreviation BaFin, has seized approximately 25 million euros ($28 million) in cash in a nationwide crackdown against cryptocurrency automated teller machines (ATMs).
Crackdown on Crypto ATMs
According to an official statement released yesterday (Tuesday), the German regulator raided 35 locations across the country and seized 13 ATM machines. The agency highlighted that the ATMs were “illegally installed” and not registered under Section 32 of the Banking Act.
The regulator, which oversees the financial market in Germany, also pointed out that the exchange of euros and cryptocurrencies through these ATMs violated the country’s existing Banking Act. Additionally, it raised concerns about the risk of money laundering.
A Massive Network of Crypto ATMs
Germany has 176 Bitcoin ATMs installed across multiple cities, according to Coin ATM Radar. Most of these machines are located in Düsseldorf, followed by the capital Berlin and then Stuttgart.
Globally, the demand for crypto ATMs peaked in 2021 with the spike in crypto prices. Although many of these locations were shuttered last year, the industry is witnessing a recovery, with 266 ATMs installed globally since the beginning of August.
These machines allow people to easily buy and sell cryptocurrencies in exchange for cash. Bitcoins can be transferred from and to these machines to wallets held by the users. However, the transaction fees associated with these ATMs are often higher compared to online exchanges.
Scott Buchanan, the COO of Bitcoin Depot, highlighted that the global crypto ATM market was estimated at $182.1 million in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 63.4 percent from 2024 to 2030. In 2024 alone, over 2,500 new crypto ATMs have been installed globally, indicating a strong upward trajectory for the market following the dip that occurred in 2022.
The German regulator further pointed out that crypto ATMs could become a hotbed for criminal activities if the operators fail to maintain proper know-your-customer (KYC) checks for transactions exceeding 10,000 euros. The forthcoming Markets in Crypto-Assets Regulation (MiCA) within the European Union would mandate KYC and the reporting of all crypto transactions.
Meanwhile, Germany is not the first country to crack down on cryptocurrency ATMs. The United Kingdom’s Financial Conduct Authority (FCA) closed 26 crypto ATMs in 2023 that were operating illegally. Like its German counterpart, the UK regulator also raised concerns about the potential use of these ATMs to launder proceeds from crimes.
This article was written by Arnab Shome at www.financemagnates.com.
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