Germany’s financial regulator, BaFin, has seized about 25 million euros ($28 million) in cash in a nationwide crackdown on automated teller machines (ATMs) selling cryptocurrencies.

Crackdown on crypto ATMs

According to an official statement released yesterday (Tuesday), the German regulator raided 35 locations in the country and seized 13 ATMs. The agency stressed that the ATMs were “illegally installed” and not registered under Section 32 of the Banking Act.

The regulator, which oversees Germany’s financial market, also pointed out that the exchange of euros and cryptocurrencies via these ATMs violated the country’s existing Banking Act and raised concerns about the risk of money laundering.

A huge network of crypto ATMs

According to Coin ATM Radar, Germany has 176 Bitcoin ATMs in multiple cities. Most of these machines are located in Düsseldorf, followed by the capital Berlin and Stuttgart.

Globally, demand for crypto ATMs peaked in 2021 with the spike in crypto prices. While many of these locations closed last year, the sector is witnessing a recovery, with 266 ATMs installed globally as of early August.

These machines allow people to easily buy and sell cryptocurrencies in exchange for cash. Bitcoins can be transferred to and from these machines to wallets controlled by the users. However, the transaction fees associated with these ATMs are often higher compared to online exchanges.

Bitcoin Depot COO Scott Buchanan highlighted that the global crypto ATM market was valued at $182.1 million in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 63.4 percent from 2024 to 2030. In 2024 alone, more than 2,500 new crypto ATMs were installed globally, indicating a strong uptrend for the market after the dip that occurred in 2022.

The German regulator further pointed out that crypto ATMs could become a hotbed for criminal activity if operators fail to implement proper know-your-customer (KYC) checks for transactions over €10,000. The upcoming Markets in Crypto-Assets Regulation (MiCA) within the European Union would make KYC and reporting of all crypto transactions mandatory.

Meanwhile, Germany isn’t the first country to crack down on crypto ATMs. The UK’s Financial Conduct Authority (FCA) closed 26 crypto ATMs in 2023 that were operating illegally. Like its German counterpart, the UK regulator also raised concerns about the potential use of these ATMs to launder the proceeds of crime.

This article was written by Arnab Shome on www.financemagnates.com.