German Financial Regulator Takes Action Against First Bitcoin ATMs
The German Financial Market Authority BaFin has ordered the crypto service provider and operator of bitcoin ATMs KKT UG to stop its business.
The German financial watchdog is stopping the operations of a company KKT UG from Berlin that allows consumers to buy and sell cryptocurrencies at ATMs.
Lack of necessary permission
According to a March 4 statement, BaFin ordered Mr. Adam Gramowski, who runs KKT UG as managing editor, to cease cross-border proprietary trading. The order was issued on Feb. 26.
On its website www.shitcoins.club, the company advertises 24 bitcoin machines für purchase and sale of cryptocurrencies in Germany. Moreover, its business apparently extends across the whole of Europe. According to his LinkedIn profile, Gramowski also works as CEO of Bitcoin Technologies in Torun, Poland.
According to BaFin, Gramowski conducts commercial proprietary trading via KKT UG, which requires a BaFin license under the German Banking Act (Kreditwesengesetz, KWG). Apparently the operator lacked the necessary permission for this.
Germany-based Bitcoin ATMs need the BaFin licence
Cryptocurrency ATMs have so far had uncertain status in Germany. Until January 2020, the responsibilities here had not been completely clarified. In proceedings on Sep. 25 of last year against the operator of the bitcoin exchange Bitcoin-24, which has since been discontinued, the Berlin Court of Appeal (Kammergericht Berlin) ruled that commercial trading of Bitcoin without the express permission of the authorities is not punishable.
The previously common practice of having the legal status of Bitcoin and other cryptocurrencies regulated by BaFin was declared illegal in that case.
In 2020, the German government decided to introduce new anti-money laundering regulations. Starting next year, cryptocurrency-related businesses such as digital exchanges, custodians and wallet providers will need a BaFin-issued license.
Companies need to hand in their applications by June 2020 but needed to signal their intention of applying for a license by February 2020.
