Germany’s Federal Financial Supervisory Authority (BaFin) has launched a crackdown on unauthorized crypto ATMs, seizing 13 machines from 35 locations across the country.
According to a report from Reuters, the operation was carried out in collaboration with the Federal Criminal Police Office, local law enforcement, and the Bundesbank. It also resulted in the seizure of $28 million in cash.
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Seized ATMs Were Installed Illegally
The seized ATMs were reportedly installed illegally, with operators failing to register them under Section 32 of the Banking Act, which governs financial services in Germany. BaFin stated that the exchange of euros for cryptocurrencies through these unregistered machines constitutes a violation of the Banking Act.
German authorities warned that unregulated crypto ATMs could become hubs for criminal activities, particularly if operators do not implement strict Know Your Customer (KYC) protocols for transactions exceeding 10,000 euros.
Crypto ATM sting in Germany leads to $28m seizure
German authorities confiscated 13 crypto ATMs and seized nearly $28 million in cash across 35 locations ? pic.twitter.com/dm29f9brep
— Creepah (@CreepahX) August 21, 2024
The crackdown comes amidst a global change in the number of Bitcoin ATMs. While 2024 saw the number of installed machines approaching record highs, July experienced a significant drop, with a reduction of 440 crypto ATMs worldwide.
The trend continued into early August, with an additional 173 ATMs removed. However, recent data from Coin ATM Radar indicates a recovery, with 266 new ATMs installed since the start of August.
The global reduction has been partly attributed to enforcement actions in the United States, where authorities have taken similar measures against Bitcoin ATM operators, including Bitcoin of America.
Last year, Bitcoin of America was forced to cease operations in Connecticut after being accused of operating without a license, following complaints from customers who were defrauded out of tens of thousands of dollars. The company agreed to shut down and pay $86,000 in fines.
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Bitcoin ATM Hacks Become Prevalent
It is worth noting that Bitcoin ATM scams have become increasingly prevalent, resulting in unsuspecting users losing substantial sums of money.
As scammers take advantage of the convenience these ATMs offer, law enforcement agencies are warning the public about this growing trend. For one, California will implement Senate Bill 401, limiting cryptocurrency ATM transactions to $1,000 per day per person.
The bill, signed into law by Governor Gavin Newsom, also sets a cap of $5 or 15{aa99edd08dd66036bd4af6c3dbe8af9b4ab31fcc55a521c2956d094a6dcd3a48} of the transaction amount (whichever is greater) on fees imposed by bitcoin ATM operators, beginning in 2025.
Last year, major Bitcoin teller machine manufacturer General Bytes experienced a security breach that led to $1.5 million worth of BTC stolen from a number of its crypto teller machine operators.
At the time, General Byes founder Karel Kyovsky said that a hacker was able to upload their own Java application onto the company’s Bitcoin ATMs, which allowed them to read and decrypt API keys to access funds on exchanges and hot wallets.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
