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German Financial Regulator Shuts Down “Shitcoins Club” Operations 

German Central Bank Chief Calls For Caution in Developing CBDCs

Germany appears to be cleansing its crypto automated teller machine (ATM) industry, as a controversial manufacturer has had its operations shut. Yesterday, industry news source CoinDesk reported that the Federal Financial Supervisory Authority (BaFin) had started shutting the operations of “Shitcoins Club” and seizing its ATMs.

Permanent Shutdown for Shitcoins Club

Citing an agency official, the news source confirmed that BaFin had ordered Shitcoins Club’s parent company, KKT UG, to cease operating in the country since February. However, the firm, along with its chief executive Adam Gramowski, kept the firm running.

The shutdown from earlier this year was a result of stricter regulatory requirements imposed by BaFin. With cryptocurrencies currently regulated under the German Banking Act, BaFin now holds the responsibility of registering and keeping oversight of ATM operators.

Although based out of Poland, Shitcoins Club has a strong presence in Germany. The company operates 17 of the country’s 67 Bitcoin ATMs, and it claims to own machines that are “bold and exciting.”

In a March 4 statement, however, BaFin ordered that the company cease its operations as it didn’t have the right license. “On its website www.shitcoins.club, the company advertises in German its bitcoin machines for purchase and sale of cryptocurrencies,” the regulator said, adding that the nature of its business made it an unauthorized entity. 

Germany’s Very Good Regulatory Week

The regulatory move occurred on the same day that law enforcement authorities in the country collected 25 million euros ($29.6 million) worth of cryptocurrencies associated with an illegal streaming site.

According to a statement from the Dresden Public Prosecutor’s Office, authorities managed to get the money from an operator of movie2k.to, one of the country’s largest illegal movie streaming services. The service had been in operation for years, although investigators managed to shut it down in spring 2013 due to copyright infringement concerns.

The site had a sprawling operation that resulted in over 880,000 pirated movie copies. Users could watch pirated movies without downloading them. Eventually, authorities arrested one of the site’s programmers in November 2019.

The programmer is alleged to have gotten over 22,00 BTC from the company’s operations. He eventually used his ill-gotten funds to acquire various real estate properties across Berlin. Apart from his exploits with the streaming site, the programmer is also reportedly under suspicion of engaging in money laundering operations through his real estate exploits. 

Per the agency’s statement, it had collaborated with other bodies, including the FBI, the Leipzig Tax Investigation Department, and the German Federal Criminal Police Office. It has been quite a productive week for German regulators and law enforcement agencies to curt crypto-related crime across the country. On Wednesday, the alleged dealers that created Chemical Revolution — the country’s notorious Dark Web narcotics operation — faced trial.

Chemical Revolution operated between September 2017 and February. The operation dealt with just about every banned substance, including MDMA, cocaine, cannabis, heroin, and amphetamine. The organization sold its products in exchange for Bitcoin and managed to earn 1 million euros ($1.2 million) over its operations.

Law enforcement eventually arrested 11 organization members after a series of investigations and sting operations. However, only seven of them stood trial on Wednesday. 

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