Due to the recent change in the law, BaFin (Federal Financial Supervisory Authority in Germany) is authorized to prohibit companies from doing business with cryptocurrencies unless the necessary license is available. A huge step back for Bitcoin! Because the Federal Financial Supervisory Authority has decided that operating Bitcoin vending machines in Germany must shut down.
Operator has to close his Bitcoin ATM’s
Bitcoin and thus Bitcoin machines are causing more and more enthusiasm worldwide. It’s easy to buy or sell bitcoins. Germany is now suffering a violent setback. Because the largest Bitcoin vending machine provider must first stop operating. Since the new money laundering directive, BaFin has been strictly taking action against companies that cannot show a corresponding license. As of this year, cryptocurrency has been classified as a financial instrument. Corresponding requirements have to be met in order to use Bitcoin and co. to offer or to be allowed to keep.
In 2018, the Higher Regional Court ruled that Bitcoin is not a financial instrument within the meaning of the Banking Act. Adam Gramowski sets up Bitcoin machines across Europe. This allowed Mr. Gramowski, Managing Director of KKT UG, to expand strongly in Germany by the end of 2019. The managing director does this across Europe. However, from 2020, BaFin will now have the authority to stop operation, since Bitcoin is now considered a financial instrument.
On its website www.shitcoins.club, the company advertises in German its bitcoin machines für purchase and sale of cryptocurrencies.
Cryptocurrencies are financial instruments pursuant to section 1 (11) sentnce 1 no. 10 of the German Banking Act (Kreditwesengesetz – KWG). The company is thus conducting proprietary trading within the meaning of section 1 (1a) sentence 2 no. 4 (c) KWG on a commercial basis without the authorisation required under section 32 (1) of the KWG. It is therefore conducting unauthorised business.
It seems that Mr. Gramowski has already responded. No more machines in Germany are listed on the official website belonging to the KKT UG company.
In order to be able to offer Bitcoin vending machines in Germany again, Mr. Gramowski has to come up with a concept to meet BaFin’s requirements. Above all, this sees strict rules for KYC management. This means that users usually have to verify themselves with ID, etc. This in turn contradicts the actual philosophy behind a Bitcoin machine. Because in the foreground, a Bitcoin machine serves to receive and send Bitcoin quickly and easily. This was the usual procedure: scan the QR code of your own Bitcoin wallet, then you pay in the cash and receive Bitcoins for it. With most machines up to 2500 € no authentication test was necessary.
More and more crypto companies are closing in Germany
Mr. Gramowski is not the only one suffering from the new regulation. Other start-ups such as Bottly Pay have also had to pull out of business.
As reported by crypto-invest.io, banks can apply for a license this year and offer cryptocurrency to their customers. This news delighted many crypto lovers. However, the disadvantages of the new regulation are becoming increasingly apparent. So the high demands on the KYC guidelines cannot be combined with the idea behind Bitcoin. Bitcoin is there to manage your money independently. The focus is on anonymity.
So how do you judge the development in Germany? On the one hand, further access to Bitcoin is opened up by banks, on the other hand, the ideal that characterizes Bitcoin is fading. The implementation of the Money Laundering Directive in Germany is only the beginning. This directive will have to be implemented across Europe. The euro area countries have a little bit of a design in how exactly this is implemented, but it is implemented.