The German Federal Financial Supervisory Authority, or BaFin, has announced new measures under the Banking Act that require licensing and permissions for the installation and operation of cryptocurrency ATMs. According to a notice on the financial regulator’s website, cryptocurrency ATMs constitute banking business, which means they fall within their regulatory remit. “Proprietary trading is a financial service, and financial commission business is a banking business, for which prior approval from BaFin is required,” the notice read.
German financial regulator classified digital currencies as a type of financial instrument.
Earlier this year, the German financial regulator announced to classify digital currencies as a type of financial instrument. Since the announcement, the regulator has taken several steps towards tightening regulation around the sector, in a bid to bring this into line with the regulation of other financial services. BaFin has also mandated licensing for custodian services, which would result in pushing dozens of German institutions towards the licensing process to become authorized to offer crypto custody services to their clients. There are currently some 28 crypto ATMs installed across the many cities in Germany, providing customers with the chance to buy a range of digital currencies, including BTC and ETH.
Crypto ATMs operating without approval from BaFin are liable to prosecution.
According to the German Financial regulator, those that operate crypto ATMs without their approval are committing an offense and are liable to prosecution: “Those who set up such crypto machines that do not have permission from BaFin are acting without permission and are thus also liable to prosecution,” the notice read. The German Federal Financial Supervisory Authority also noted that companies who make the premises or power or internet connections available to crypto ATMs operators are involved in their unauthorized transactions and are therefore themselves possible addressees of administrative measures.