Against the backdrop of global cryptocurrency markets experiencing volatility, Germany has recently taken a series of major measures to strengthen regulation and services for the cryptocurrency industry. These measures not only reflect the German government’s high attention to the cryptocurrency market, but also mark the gradual opening of its financial system to digital assets.
Seizing cryptocurrency exchanges
On September 19, 2024, the Frankfurt General Prosecutor's Office announced that the German Central Office for Combating Cybercrime (ZIT) and the Federal Criminal Police Office (BKA) jointly seized 47 cryptocurrency exchanges. These exchanges were accused of deliberately condoning cyber criminals to engage in illegal activities such as the "underground economy", concealing the source of criminal proceeds on a large scale, and engaging in money laundering and criminal activities.
According to the German official statement, these exchanges failed to fulfill their "know your customer" (KYC) obligations, resulting in the lack of customer identity and background checks. These seized exchanges not only support anonymous financial transactions, but are also suspected of being related to ransomware groups, dark web traders and botnet operators. Therefore, the closure of these exchanges is to combat the "underground economy" and the criminal risks it brings.
Currently, the German government is turning its attention to potential criminal users. In this operation, law enforcement agencies seized a large amount of customer and transaction data. However, the masterminds behind these activities usually live in other countries outside of Germany, making it impossible to carry out large-scale prosecutions. In addition, some countries "tolerate or even protect" such criminal activities, and German law enforcement agencies often cannot reach them. Therefore, given the difficulty of law enforcement, the measures that German law enforcement authorities tend to take are aimed at weakening and destroying the illegal activity infrastructure of cyber criminals in order to maintain the stability and security of the financial market.
The websites of the exchanges that have been seized include Xchange.cash (over 400,000 users), 60cek.org (over 300,000 users), Baksman.com (280,000 users), Prostocash.com (260,000 users), and other smaller platforms, whose websites now display a clear warning from the German government: "We found their servers and seized development servers, production servers, backup servers. We have their data, and naturally we have yours: transactions, registration information, IP addresses. We started searching for traces. See you soon."
Expanding access to cryptocurrency
In contrast to the tough measures of closing exchanges, the active layout of German financial institutions in the field of cryptocurrency shows their open attitude towards digital assets. DZ Bank announced a partnership with Boerse Stuttgart to provide cryptocurrency trading and custody services to customers of its 700 partner banks. This cooperation will enable more retail customers to access cryptocurrencies and expand the market scope of digital assets.
Martin Falk, CEO of DZ Bank, said that the cooperation will provide customers with a verified and fully compliant cryptocurrency trading and custody infrastructure. It is expected that the first batch of banks will access this service within this year and carry out phased promotion and testing. This move means that ordinary investors in Germany will be able to participate in the trading of digital assets such as Bitcoin and Ethereum more conveniently, further promoting the popularity of cryptocurrency in Germany.
At the same time, Germany's second largest bank, Commerzbank, also announced that it will provide Bitcoin and Ethereum trading services to its corporate customers. Commerzbank has reached a cooperation with Crypto Finance to use its platform to provide digital asset trading for customers to meet the growing needs of institutional investors. A spokesperson for Commerzbank emphasized that this new digital asset service will enable corporate customers to access Bitcoin and Ethereum for the first time.
Summarize
These developments mark an important change in Germany's approach to the cryptocurrency sector. First, the government's strict regulation of cryptocurrency exchanges reflects its emphasis on financial security. By closing down exchanges suspected of illegal activities, Germany hopes to remove bad elements from the market and create a safe environment for compliant financial institutions and investors.
Secondly, the actions of DZ Bank and Commerzbank show that traditional financial institutions are gradually accepting and integrating into the cryptocurrency market. As more and more banks provide cryptocurrency trading services, investors will be able to participate in this emerging market with higher trust and security. This also means that cryptocurrency will no longer be a "plaything" for niche investors, but will gradually become a mainstream investment tool.
In general, Germany's active supervision and layout in the field of cryptocurrency not only helps to promote domestic investors' acceptance of digital assets, but also provides a strong demonstration for the digital transformation of the global financial market. With the improvement of the regulatory system and the active participation of financial institutions, the future of digital assets is full of hope.
