Do you think owning a Bitcoin ATM is hassle-free? It is anything but easy in Germany. The latest regulations have become much complex, to say the least. If we think of it the other way, the regulatory pressure is necessary. With an increase in the crypto scams, the German government has taken these steps.
The German government has made it compulsory to take regulatory approval before installing BTC ATM. Now a question arises whether every cryptocurrency ATM needs to follow this rule or not? The answer is according to the German regulatory is; the ATMs that will provide transactions in Bitcoin and Litecoin will require a license.
BaFin, Germany’s financial regulator will provide this license to ATM operators that offer both of these assets. According to the German regulatory, proprietary trading comes under financial services. Every financial service provider operates under the banking business. In a nutshell, a financial service provider needs a license to operate in Germany.
The officials, however, believe that this rule is not entirely new. Other financial services providers are also working according to this rule. The crypto machine operators that don’t have the permission of BaFin, will be considered as an illegal business.
Another factor of setting up Bitcoin ATMs anywhere came into existence when the regulator said that any business or property owner can have a BTC ATM set. However, the only condition to set the ATM is not own the license. In short, the BTC ATMs will be owned by someone else and not the property owner.
Why This Strictness Concerning Bitcoin ATMs?
Some analysts have concluded that the increase in Bitcoin ATMs will also increase in Bitcoin-related crimes. According to the analysts, the Bitcoins ATMs are being used to transfer funds to high-risk exchanges. These exchanges, in turn, are the number 1 hub for financial criminals.
Since Bitcoin ATM is not just used for crypto transactions, but it also gives direct access to the exchanges. Any user can buy or sell the cryptocurrency without a digital wallet. With almost 8000 more Bitcoin ATMs in the U.S. alone, it was apparent that BTC ATMs are the target of regulators.
Some scammers are using Bitcoin for selling drugs online. Due to the anonymity of Bitcoin transactions, it is their only choice to get paid in exchange for drugs. To stop such kind of scams and other money laundering incidences, the regulators of every country including Germany have fastened its belts.
Some Bitcoin ATM operators are unaware of such kinds of frauds and their worries keep increasing with every other transaction. Every transaction will be tracked under proper regulatory compliance and that’s what prevents money laundering.
What Other Countries Are Doing About It?
Regarding an increase in money laundering in Bitcoin, many countries are coming forward against it. For example, the European government has implemented a directive to stop money laundering in the country.
5th Anti-Money Laundering Directive or 5AMLD was implemented at the beginning of 2020. According to this law, there should be transparency in financial transactions in Europe. This directive is not only limited to fiat currency transactions but is also pointed towards cryptocurrency transactions.
The number of Bitcoin ATMs is increasing worldwide since its first inception. But it should not be ignored that every country has different laws regarding Bitcoin ATMs. For instance, Canada that holds almost 10% of the overall Bitcoin ATMs is also taking steps to defeat money laundering.
Canada has made it clear in the regulations that virtual transactions will be considered as Money Service Businesses (MSBs). Canada has passed a law in Vancouver to ban Bitcoin ATMs. This ban has taken effect from June 2019.
Some firms swap crypto for cash and it impacts the Bitcoin operators the most. In concern to this situation, the Canadian government has made it mandatory for the Bitcoin ATM operators to report every transaction that exceeds CAD 10,000.
The main purpose of this law is to regulate virtual transactions. Because these transactions are easy to hack for the finance launderers. The idea of strict regulations will put an end to finance terrorism and other crimes.
What Is The Reaction Of Bitcoin Operators?
Just the way every regulation works, Bitcoin ATM regulations and other laws are also getting mixed reactions. While some of the BTC ATM operators seem to like the security aspect given by the regulations, others seem to have a different opinion.
It is not easy to pass the process of becoming a licensed Bitcoin ATM operator. It has a lot of steps and the scrutiny is quite strict. The long process is okay for some operators but some of them are not liking it.
Some of the ATM operators are worried about sharing user data with the government. Bitcoin transactions are considered safe and private. But revealing too much information can also be difficult for the ATM operators. Above everything, it is mandatory to protect the operators and ATM users from money laundering.