Germany’s financial markets regulator is cracking down on a digital currency ATM company for operating without a license. The regulator is seizing ATMs operated by Shitcoins Club, which it says hasn’t been abiding by the set rules.
Germany’s Federal Financial Supervisory Authority, better known as BaFin, has previously issued a cease order to Shitcoins Club, stating that the company was offering services it wasn’t licensed to. BaFin claimed that the company wasn’t licensed to facilitate ‘proprietary trading on a commercial basis.’
For a while, the company indicated on its website that its ATMs were no longer available in Germany. However, a few weeks later, the company got back to its former ways.
Five months since issuing the cease order, BaFin is now stepping up its efforts by seizing ATMs operated by Shitcoins Club. The regulator was quoted by CoinDesk saying the company failed to follow the order and has kept its ATMs in operation since then.
Led by its defiant CEO Adam Grabowski, Shitcoins Club is one of the biggest players in the German digital currency ATMs industry. According to a report by German newspaper Handelsblatt, the company operates 17 of the 67 ATMs in Germany.
BaFin has toughened its stance towards the digital currency industry as it seeks to comply with the Fifth Anti-Money Laundering Directive (AMLD5). The regulator has been especially stringent with ATM providers.
The tough approach has garnered praise from both the digital currency industry and beyond, with many believing that the ATMs have been used to facilitate crime. Shitcoins Club, for instance, only requires identity verification for deposits above €15,000 (~US$17,657). According to the report, this requirement only came into effect in January 2020 following regulatory pressure.
Christoph Iwaniez, the CFO of digital currency banking startup Bitwala, is one of those who believes BaFin should be tough on digital currency ATM operators. Iwaniez said the ATMs only attract two groups of people—those with a high demand for privacy and those with criminal intent. He believes that it’s the criminals who have led to the rapid rise of the ATMs as conventional digital currency products become easier to trace.
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