Installing a crypto-ATM in Germany triggers a licence, BaFin clarifies

Crypto currencies are becoming both more popular and well established. As a result, they are increasingly in the eye of the supervisory authorities.

Following the introduction of a new licensing requirement for the crypto custody business at the beginning of this year, the German Financial Supervisory Authority (Bundesaufsicht für Finanzdienstleistungen or BaFin) has now provided further clarification of the rules.

On September 8, 2020, BaFin made clear that the installation of crypto-ATMs also triggers a licensing requirement under the German Banking Act (Kreditwesengesetz or KWG).

In BaFin’s view, the public installation of ATMs where crypto-currencies (such as Bitcoin, DASH, Litecoin or Ether) can be bought or sold constitutes a form of proprietary trading business or financial commission business which corresponds in MiFID terms with reception and transmission of orders. And so, it requires a license in accordance with the KWG.

BaFin has also pointed out, that issuers of such ATMs who don’t have a corresponding license are liable to persecution and that BaFin is willing to enforce its measures - if necessary, by way of administrative enforcement. In particular, business premises and machines can be sealed.

Please note also that individuals or companies who make their premises or electricity and internet connections available to such crypto machine operators are possible targets for administrative measures. Landlords should, therefore, always make sure that their tenants have obtained a BaFin license in such cases - a mere commercial registration is not sufficient.

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