Germany Cracks Down on Illegal Cryptocurrency ATMs: BaFin Issues Risk Warning

Germany's financial regulator BaFin has taken decisive action against illegal cryptocurrency ATMs, seizing 13 machines and over $270,000 in cash.

This crackdown highlights the growing concerns over the misuse of these ATMs for criminal activities.

Learn more about the global trends and the future of cryptocurrency ATMs in our detailed analysis.

Seizure of 13 Cryptocurrency ATMs and $270,000 in Cash

On August 20, 2024, the German Federal Financial Supervisory Authority (BaFin) announced the seizure of illegally operated cryptocurrency ATMs.

The operation, conducted in collaboration with the German Federal Criminal Police Office (BKA) and local law enforcement agencies, targeted cryptocurrency ATMs across Germany. A total of 13 ATMs were seized, along with approximately $270,000 in cash.

The operators of these seized cryptocurrency ATMs had installed the machines without proper registration under banking law.

Those found guilty of operating illegal cryptocurrency ATMs in Germany could face up to five years in prison.

BaFin also raised concerns about the potential for some ATMs to attract users with criminal intentions. Under German law, Know Your Customer (KYC) procedures are required for transactions involving cash amounts exceeding approximately $11,000.

Non-compliant services are flagged as high-risk for involvement in activities such as terrorist financing and money laundering.

Global Trends: The Challenges Facing Cryptocurrency ATMs

According to data from Coin ATM Radar, the number of cryptocurrency ATMs worldwide had been steadily increasing in the first half of 2024. However, the removal of 440 ATMs in July halted this upward trend.

A significant factor in this decline is the closure of cryptocurrency ATMs in the United States.

Since 2023, there has been growing pressure on cryptocurrency ATMs in the U.S. For example, in May 2023, "Bitcoin of America," an ATM operator, ceased operations in Connecticut due to licensing issues.

This crackdown contributed to the closure of around 4,000 cryptocurrency ATMs in the U.S. by July 2023.

The U.S. Secret Service, responsible for combating cyber fraud and money laundering, has been continuously investigating criminal activities involving cryptocurrency ATMs since 2023.

Despite the challenges in the U.S. and Germany, some countries continue to see an increase in cryptocurrency ATMs. One such country is Australia, where the number of cryptocurrency ATMs has been on the rise since 2023.

In May 2024 alone, 70 new ATMs were installed, followed by an additional 52 in June 2024.