Many cryptocurrency buyers could likely claim to be part of such a club, but in Europe, Shitcoins Club is something else: a series of Bitcoin, Ethereum, and Litecoin ATMs. And Germany’s financial authority just took action against the company behind them.
A Federal Financial Supervisory Authority (BaFin) spokesperson confirmed to CoinDesk yesterday that it has impounded 17 ATMs from the Polish operators behind Shitcoins Club, KKT UG. BaFin instructed the group to cease operations back in February, but CEO Adam Gramowski reportedly did not comply.
BaFin began shutting down the Shitcoins Club storefronts and seizing their hardware on Wednesday, with some 17 machines—many in the shape of the Bitcoin logo itself—taken. Germany only has 51 total Bitcoin ATMs in operation, according to industry tracking site Coin ATM Radar.
Last November, German parliament passed a law that allowed banks to begin selling and storing cryptocurrencies at the start of 2020, and allowed other crypto businesses and custody providers to continue to operate if they secured a license. The moves by the world’s fourth-largest economy had some hailing Germany as a potential “crypto heaven.”
In March, BaFin provided further guidance that Germany recognized cryptocurrency as financial instruments. That provided some companies with relief, given the clearer understanding of their regulation, but it also meant that some others were now running afoul of the official guidance.
BaFin’s public release of its notice against KKT UG and Shitcoins Club in early March noted, “Cryptocurrencies are financial instruments… the company is thus conducting proprietary trading… on a commercial basis without the authorisation required under section. It is therefore conducting unauthorized business.”
According to the Shitcoins Club website, the company still operates dozens of crypto ATMs in other European countries, including Italy, Poland, and Spain. None are currently shown in Germany, however.
A similar case recently unfolded in the US, where the Department of Justice last month announced that it had shut down an illegal crypto ATM business in California that had exchanged some $15-25 million from 2014-2019. The man behind that business, 36-year-old Kais Mohammad, admitted to knowingly laundering money from criminal enterprises and agreed to plead guilty. He faces up to 30 years in federal prison.