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Germany’s Federal Financial Supervisory Authority (BaFin) has ramped up its efforts to regulate the cryptocurrency market in the country by targeting illegal ATMs.
BaFin seized approximately €25 million ($28M) in cash from unregistered crypto ATMs in a sweeping operation.
According to a Reuters report, BaFin’s crackdown was a well-coordinated effort involving raids on 35 locations across Germany. Authorities were able to seize a total of 13 cryptocurrency ATMs that had been installed without the required registration under Section 32 of the German Banking Act.
This law mandates that any financial service provider, including those dealing in cryptocurrencies, must be registered and compliant with the country’s financial regulations.
The illegally operated ATMs were primarily involved in facilitating the exchange of euros for cryptocurrencies and vice versa.
BaFin explained that such unregulated activities pose significant risks to the financial system, particularly in the areas of fraud and money laundering.
The agency’s actions align with its broader mandate to oversee and regulate the financial market in Germany, ensuring that all financial transactions are conducted within the framework of the law.
Notably, Germany plays a significant role in the global cryptocurrency landscape, with a substantial presence of cryptocurrency ATMs. In fact, the country is home to 183 Bitcoin ATMs, with the highest concentration in Düsseldorf, followed by the capital city of Berlin and then Stuttgart.
Largest installations of bitcoin ATM's by country in July 2024: Australia 🇦🇺 +31, Puerto Rico 🇵🇷 +22, Canada 🇨🇦 +16, New Zealand 🇳🇿 +13, Germany 🇩🇪 +9, Italy 🇮🇹 +8, Poland 🇵🇱 +6
More info here: https://t.co/5prbjfxmNj pic.twitter.com/oCFlDACEKh— Coin 𝔸𝕋𝕄 Radar ₿🏧🌎 (@CoinATMRadar) August 12, 2024
These ATMs offer users the convenience of buying and selling cryptocurrencies directly for cash, which can then be transferred to and from digital wallets.
However, the convenience of these machines comes at a cost, as transaction fees are often higher than those on online exchanges.
Global Market Trends and Projections for Crypto ATMS
The market for cryptocurrency ATMs continues to thrive, overcoming regulatory and operational hurdles to achieve steady growth.
Grand View Research reports that the global crypto ATM market was valued at $182.1 million in 2023.
The market is projected to grow at a compound annual growth rate (CAGR) of 63.4% from 2024 to 2030, signaling strong investor confidence and increasing adoption of these machines worldwide.
Over 2,500 new cryptocurrency ATMs were installed globally in 2024 alone, marking a recovery from the downturn experienced in 2022.
However, BaFin’s recent actions highlight a growing concern among regulators worldwide who view these portable kiosks as a conduit for money laundering and other illicit activities.
BaFin pointed out that these machines could become a hotbed for criminal activity without stringent know-your-customer (KYC) checks, particularly for transactions exceeding €10,000.
The upcoming Crypto-Assets Regulation (MiCA) markets within the European Union aim to address these concerns by mandating comprehensive KYC requirements and reporting all crypto transactions, thereby tightening the regulatory framework around digital assets.
