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Germany’s financial regulator has seized almost 25 million euros ($28 million) in cash due to a nationwide operation targeting cryptocurrency ATMs.
In a statement, the regulator BaFin said 13 machines had been seized as they were found to be operating without the necessary permits which carries the risk of money laundering.
BaFin officials, with the support of police, German Bundesbank, and the Federal Criminal Police Office visited a total of 35 locations to take action against the exhibitors.
They also collected the illegally operated vending machines with around 60 emergency forces.
“The exchange of euros into cryptocurrencies and vice versa represents commercial proprietary trading or a banking transaction and therefore requires the express permission of BaFin according to the law (§ 32 Banking Act). Otherwise, the business will be operated illegally.”
The permission requirement is in place to protect the financial system and consumers, with the regulator saying “trading in crypto values involves significant risks up to total loss.
“Illegal operators will be prosecuted by the police and public prosecutor’s office. The perpetrators are threatened with up to five years of imprisonment.”
How common are crypto ATMs and are they legal?
While cryptocurrency has garnered huge interest over the last few years, the regulation around the sector is still in its infancy.
The ATMs allow people to buy and sell cryptocurrencies with cash or debit cards. According to a database by CoinATMRadar, there are more than 31,000 crypto ATMs in the US and 7,000 more around the world.
In the United States, operators of these ATMs have to register with the Treasury Department’s FinCEN under federal law. Then, the regulations for operators are set at the state level.
If the ATM hasn’t been registered and is up and running, operators can face up to 30 years of prison time in the US.
Some states have passed laws to regulate the machines in the last few months, including governors in Minnesota and Vermont who brought in AARP-backed legislation in June.
Featured Image: Via Ideogram AI
