Bitcoin Forum

https://twitter.com/LocalBitcoins/status/541991711040606208

What is happening at Germany ? I heard that they have given permission for Bitcoin ATMs too ?

As assumed and stated it is to do with regulatory reasons that obviously Localbitcoins doesn't currently comply.

Localbitcoins is one of the oldest exchange. So what regulatory issue has suddenly popped up ? Moreover, AFAIK, they are from Finland. So, how come German regulation applies to them ?

Where it's based doesnt matter because if they want to operate in a specific country then they need to apply and comply with local laws.

It is an intersting move, maybe they are just protecting themselves. Currently as bitcoin is "private money" you are allowed to sell it, but if you are selling in a commerical manner, repeat sales ect then you need a money transmitter license.

ATM operators also need a money transmitter license for the most part.

It is not easy to get  a money transmitter license in Germany, this is one reason why bitcoin.de had to partner with fidor bank to even be allowed, and it is a p2p exchange. This also could be a reason why skrill has its company registered in England but is more or less a German company.

Problems pop up all the time for various reasons but it's usually because the authorities have suddenly took an interest or some new laws or regulations have come into place.

Why they have decided to close it ? I think it is not a good idea , but at the end why this type of decision ?

Is there anyone from Germany who can really confirm that LocalBitcoins is unavailable at their location ?

Me too , I'm interested  to know if it is a real  thing or not. Can someone confirm ?

Obviously some type or legal or regulatory pressure.


Why do you need conformation when Local Bitcoins tweeted about it themselves?

German government needs to stop money from getting out, it is needed to save the Euro ...  >:(

Or maybe they are just under pressure because so many Germans have been scammed when stolen bank accounts were used to buy coins? So far LBC has done nothing to prevent that at all.

We will see. If it is about cash trades, it means totalitarian reasons. If it is about SEPA/bank transfers, that would make perfect sense.

What are the alternatives to LBC?

From Germany to Bangladesh, every government is worried that money is going out. So, where the money is going in ?

For the moment I don't know another service like localBitcoins , because I just got back here in the forum & I'm an early adopter from 2011 and I would like to know how to sell some bitcoins.

Derp.

To start with, there is no money transmitter license in Germany.

Second, according to Germany's interpretation it comes under MiFid (http://en.wikipedia.org/wiki/Markets_in_Financial_Instruments_Directive).

They potentially (I think not, because jurisdiction) need the licenses required for a 'Multilateral trading facility (http://en.wikipedia.org/wiki/Multilateral_trading_facility)' which is a step down from a full blown commodities/stock exchange.

But yes, that is why Kraken/Bitcoin.de use Fidor's license. As that covers MiFid.

Fidor is a bank, such is needed only for wires. Bitcoin.de has its own system of registering bank accounts and work with Fidor, because many banks do not like Bitcoin.

So that is clear; in fact it would be nice if LBC would eliminate SEPA scams that way.

But, but, but: for LOCAL trades, and that is what LBC is all about, one would need no Fidor or anything else, because it is perfectly legal to do cash trades for legal goods and services, in Germany.

The limit is 10 000 EUR for businesses but not private counterparties (afaik)

This makes no sense so far: if putting buyers and sellers together would require a license, any forum or newspaper that lists small ads, would need such a license... ???

We are in the last phase of testing of our exchange and will launch soon on www.100bit.co.in. Its going to be similar to LocalBitcoins but with more feature. If you are interested, you may like to leave your ID on the site for an early invite...

i am from germany, getting this message:

"Unfortunately LocalBitcoins is currently not available in your selected region. Please look for other location or come back later."

https://pbs.twimg.com/media/B4XWkchCUAAWpvT.png

but i can login and browse adds. after logging in it looks normal...

I can confirm! To reach the site I have to use proxy from outside of germany. I checked if any seller and services from germany are available. Nothing! Each city and known sellers can not be find any more.  :'(

First of all you are going to need a license from bafin whatever you want to call it,"transmitter or not"  the bafin gives you a license. People that wanted to have ATMs were told they need a license from bafin.

Second of all if you are going to sell bitcoins on a comerical basis in Germany you are going to need the ok from bafin.

The issue -could- be that LBC is registered in finnland, I think. That is in the EU and then they might have to comply with some EU regulation or could be presured by an EU coutnry more than a company not based in the EU.

i am in germany, i can access the site, login and browse ads. only getting a message on the mine site

The issue is Germany interpreted MiFid as covering bitcoin exchanges. Bafin is the regulatory body that is relevant to this, but there is no such thing as a money transmitter. The closest thing to that terminology would be a payment institution which is the relevant law in France + Luxembourg.

That is like saying that the London Stock Exchange is pretty much a remittance company.

But yes, that is the most likely reason, sounds like a lawyer of theirs is a little jumpy because generally speaking its not how EU regs go, but I don't know how much of a difference the fact its P2P bank wise would make.

laws are good for BTC marketing, but the prohibitions are not good... :/

You can browse German ads but not create new ones.

Methinks they got some stupid court order and have to follow it until the lawyers shoot it down. I hope so.

Otherwise Queen Merkel has gained a little extra power over her peons.

Of course the peons can use any website in the world to list buy and sell ads, welcome to the "Neuland" aka internet.

it seems like i can sell to open ads. got only 0.18€ on lbc atm

EDIT: yeah placing an ad does not work

Yes thanks for that friendly explanation.

I bet the lawyer got a letter from...... bafin which is the regulatory body that is relevant to this.

bitcoin.de is p2p and needed the ok from ....... bafin. LBC is lacking this.

bitcoin.de is in Germany so subject to their laws, of course MiFid is EU laws but its just Germany's interpretation. I may be missing something but I think they are just scared.

From that angle, they should also close their operation in Bangladesh.

http://www.telegraph.co.uk/finance/currency/11097208/Why-Bangladesh-will-jail-Bitcoin-traders.html

LBC is not a money transmitter though? It's just like a classified site. It's a bit like eBay - shouldn't the onus be on the seller to register and comply with the relevant authorities and regulations?

Yes I think they are scared and/or got a letter from bafin.
It will be interesting to see if the offers in the Mycelium wallet will increase or not.


Well that is what I was saying. Bitcoin.de is not much more than that either yet they are required to comply with regulations.

probably have sth in common with people using fake euros to buy btc

This is a new development

The problem with localbitcoins is that criminals are always exploring new ways to utilize it and created lots of complain from victims, when those complains reached police, they will turn to localbitcoins and give them pressure

A typical scam nowadays is to sell goods (which does not exist at all) online and direct the buyer to pay to localbitcoins' bitcoin seller account. And when the seller release the coins, the scammer just run away with coins, leaving the seller facing lots of complain from victims

So eventually those sellers on the platform have to comply with "know your customer" rule and collect ID document from buyers. But I think localbitcoins just do escrow service, thus not directly related to money transfer, should not be regulated

It's a pity that Finland is a country using euro, more affected by the financial regulation rules in euro zone

I don't think that LBC will ever force their customers to go through KYC/AML verifications with them directly for that exact reason (they are only an escrow service). It has been ruled/determined that someone running an escrow service does not qualify as a money transmitter and will not be regulated as such. The seller of bitcoin on the other hand technically is a money transmitter and should comply with KYC/AML rules, however they rarely do (AFAIK)

Selling Bitcoins in a commercial manner in Germany requires a licence from the BaFin (http://en.wikipedia.org/wiki/Federal_Financial_Supervisory_Authority). Whether payment is received in cash or via bank transfer is not relevant.

I'm not sure where you get the 10,000 € figure from. The only such limit I'm aware of is when entering or leaving Germany: Any cash or cash-equivalents exceeding 10,000 € in value must be declared to customs in that case.

Well you an buy/trade Gold up to 14.999,- without identification too; maybe that's the limit he means.

Its specified in the Anti money laundering rules (Geldwäschegesetzt - GwG).

Hmm, I use localbitcoins here in Germany to get my dollars changed to euros via Bitcoin.

I will look into this more. I still have my sales open, I just sold some coins last night.

Thanks , I will contact  you. Now I should restore all my old hard disk....

It's quiet complicated. I think there are two reasons:

- whoever provides some financial service to german customers needs to be licenced by an EU-country. Finnland is member of the EU but has no regulatory policy for bitcoin, so no regulation, no licence.

- in an oversight the bafin (german body of financial regulation) told that people are free to trade bitcoins privately. But people that register in a list of local sellers could need a licence. In the past it sometimes happened that german sellers of bitcoins did run into trouble with the bafin. Maybe this is the major reason.

 

^^^
This!!

It would help a lot if localbitcoins wouldn't remove negative feedback from well known scammers.

One of their largest traders had quite a few people angry in the Spanish sub-forum from tricks he pulled at localbitcoins (taking just a slice for the golden goose won't kill it right?). His localbitcoins score would fluctuate from 100% to 98% and back to 100% for some inexplicable reason, multiple times. It is a guy who walked away with a few hundred bitcoin from BTCJam (some mine), and got banned from bitcointalk for his epic antics.

You can find people in the scammer accusation forum and the spanish sub-forum going to the police with everything they have on that guy which is understandable. It is a matter of time for stuff like that to build up at some police entity, with "localbitcoins" appearing repeatedly in print until getting forwarded to some financial regulator.

Now I don't know german or the german sub-forum but I wouldn't be surprised if there were more than a few germans scammed and filling complaints with "localbitcoins" named out of frustration.  

does someone know the legal reason supporting this?
it sounds quite strange

It was likely the online transfers that caused the most problems. SEPA transfers for bitcoins, I never understood how this could be done without abuse so I stayed away.

Cash exchange is very difficult to scam. Though I made sure to read up on testing for counterfeit bills first.

Wow, strange legal movement, I hope localbitcoin is up soon, this is not good

I think Bitcoin can be regarded as a digital commodity like eBook or MP3. If they try to force bitcoin sellers to have KYC from buyers, then these e sellers should also come under the same periphery.

In the States, Bank of America (probably other banks, as well) has a feature for people to send funds via email. If German banks have this feature, couldn't the German people simply contact each other by a different email account, or via placing an ad in the American Local Bitcoins, and then facilitate the trade for funds through their email account attached to their bank account?

See https://bitcointalk.org/index.php?topic=887668.0.

:)

Yes, in principle any kind of digital product can be used for this kind of scam (cheat someone into paying for you and get the product and disappear), since the delivery of digital product is not traceable unlike physical goods (have a physical receiving address). However, bitcoin is a financial product, it is much easier to resell than any other digital products, so it is a requirement for such kind of product to follow KYC rule

Even if the bitcoin seller collected the id document from the buyer, the real buyer (scammer) could still be another person. He could collect the id document from his victim and send it to the bitcoin seller to pass the KYC check. And the scammer could stay in another country to do this kind of scam so that he is 100% safe from law enforcement

This kind of scam makes traditional bank transfer method very risky, the only safe way is to go through mobile payment, where you can see the buyer's telephone number and sms/call him to confirm the bitcoin trade, I think this will become the trend for P2P trade in future

Why do u think traditional bank transfer method is risky ? It is time consuming and expensive, but why risky ? Because, bank transfers are mostly irreversible in nature !!! Moreover, I dont think, mobile payment is as safe as traditional online payment. One bitcoin security researcher mentioned the vulnerability of SMS in the context of 2FA...


https://twitter.com/wiz/status/528806600941662209

100% correct; there was massive scamming going on (buying with stolen bank accts, man in the middle etc.) and there are enough complaints inside and outside their forum.

In essence, to receive a bank transfer within the specified time limit, sellers had to list the acct info in the ad - which is an excellent target for criminals, who can hack accounts and when successful, buy coins from such an ad.

Probably, German authorities were fed up with all that and have now pulled the plug.

I have recommended to LBC to do some sort of bank account verification like bitcoin.de or Paypal does, to ensure the buyer controls the account, or introduce escrow. Those two options would stop most scammers without requiring KYC (and after all, people paying with bank transfers are not anonymous at all).

LBC did give a fat rats ass and now the shit has hit the fan.

Elwar made my day :D :D

Well, then i don't see their point, for p2p exchange in germany most people use bitcoin.de/kraken etc anyway - they could just remove that option ;) And there are good verification methods for german customer, better than in all other countries in the world, i.e. Postal identification service etc.

If they would just concentrate on what localbitcoins is all about -  selling _locally_ via Euro, there aren't aren't many ways to get scammed if you meet in a public place like a bank and let them check the Eur bills directly.

+1

but ... if you google Bafin and localbitcoins, it could be that I was wrong and this is not about scammers at all but about fighting bitcoin after all  :(

let's see:

a) if scammers are the reason, LBC could enable local trades only for Germans or verify buyers bank accounts
b) if totalitarism is the reason, they will force verification and/or stop Germans from trading permanently

NO. Sellers can be without KYC, because their coins are taken in escrow and are always fungible.

However buyers can use stolen accounts, in which case the transfer is reversed and police gets the seller in hot water.

So, risk is totally on sellers side atm - only escrow or bank acct verification can change this.

Normally scammers dont control accounts over a long time, so a verification paypal-style (transfers of small amounts) would stop most scams.

Really missed that part about german weird regulation (reading reddit every day).
Thats bad for germany only ;  )

You can forget about putting the blame on bitcoin or localbitcoins for this one.

Hacked bank accounts and hacked credit cards is something entirely the fault of the police and the government, and they love producing shitty banking services and shitty credit cards that can be cloned so as to scare the peasants into socialising losses to hackers and as an excuse to have everyone earmarked for tax reasons, not even remotely for security reasons, that's why they keep trying to force reversibility of transactions, so that the taxman can look up an ebay seller's history nothing else, hacked accounts have been occuring for ages and what have the bankers done, nothing just keep producing the shitty cloneable cards and shitty atms etc etc. This is an attack on crypto make no mistake, but not all countries allow police to hide as secret police as they approach sellers.

This is much easier said then done. The fact that bitcoin is not centralized (and is p2p) means that it is nearly impossible to force traders to act with any guidelines that are "set in stone"

Link is already in the OP. Why did u quote it again ?

Is it still blocked in Germany or there is any progress ?

It is still possible to access the web site from Germany. The "only" thing that is no longer possible is creating, editing and searching for offers in Germany. Existing offers in Germany have remained active and can still be accepted if you have the direct link or find it via a user's profile page. The escrow system also continues to work.

What if you are using Tor ?

I still have my listings up. I did get contacted last week by a buyer and everything from there works fine.

It doesn't matter. Searching within Germany or creating offers in Germany is disabled site-wide.

Oops... that is difficult then.

Are Bitstamp & BTC-e are operating normally within Germany ?

Yes but they do not take cash (or allow cash withdrawals), which is the real problem here =/

Do u mean they are not allowing online transfer from Germany ? Then how come they are operating ?

Do I mean they do not take cash (actual Euro Notes) and they don't let u withdraw cash. They only take virtual Euros and they want your identity ...

Strange, I can search by city in Germany and get a full listing of people. Not even logged in.

you can change your location to a city in a neighbouring country, then look at the map

it is however a problem that people cannot edit/create ads, just enable existing ones

I am not so sure how temporary the problem truly is, so alternatives are needed....back to the old times, the Want ads?  ::)

Brilliant, really brilliant, how Germany is trying to head back into the past; just not sure if the BaFin is to blame or the scammers (which is LBCs fault then)  >:(

Most German sellers are acting illegally under German law. I don't know if LBC's "retreat" from Germany is the result of actions on BaFin's side or if LBC is just being proactive. In any case I doubt we'll see them return any time soon.

Mycelium's Local Trader seems to be an acceptable alternative for now.

They only recently (within the last few days) suspended service within Germany. I would imagine that some features would temporarily still work as they make adjustments to their site (and discover they forget to disable certain things within their site)

The things that weren't working last week are now working. I see no place where anything is blocked. Though I did not try to create a new sell ad.

Edit: I did notice the map does not display all locations. So you need to search by city.

Seems it is the time to make TOR version of LocalBitcoins.

Didn't localbitcoins stop their service purposely only in germany? If so, they won't launch a tor website so that Germans can use it.

I don't think this would work very well. Whenever you trade with someone on a service like LBC, you are risking that the other party is some kind of attacker (potentially a government attacker seeking to discover the identity of people breaking their aml type laws)

no buddy am from germany

They did and I don't think this would be of much use. In order for your ad to "work" you need to accurately disclose what country you are in so any potential trader can send money to the right country via whichever payment method is being used

That would be risky for the users as online FIAT transactions can easily be traced. F2F meeting may also get interrupted by agents.

P2P private transactions are not illegal, whether in cash nor other means of payment.

The Bafin is taking the stance that people who place an ad on LBC, are creators - not users - of the marketplace while responding to an ad is fine. I do not think that stance will fly in court. This would mean that any individual actively placing an ad for something (Ebay, small ads, whatever) would automatically be considered a professional dealer and subject to all sorts of regulations. On top of that there is still the question, is BTC money at all? If it is merchandise, not money, it would be treated like gold (which can be bought at professional dealers up to EUR 10 000 per day, for cash, anonymously).

But of course, people and LBC staff try to avoid legal hassle and this is the result.

I hope that this is taken to court soon, because it would be so wonderful if a court ruling in Germany states than BTC is money.  :D

By the way, it is very easy to still use localbitcoins.com in Germany, just switch to another country in the 'Change' link of "Showing advertisements in Germany. Change", siehe my other post (https://bitcointalk.org/index.php?topic=1291637) about this.