While the definition in the Banking Act Kreditwesengesetz explicitly includes units of account Rechnungseinheiten they are not included in the definition of the Securities Trading Act Wertpapierhandelsgesetz. As a result, Bitcoin trading platforms structured as a MTF would only require a license as a financial services institution under the Banking Act Kreditwesengesetz but would not have to exclude retail investors.
Still, BaFin has not commented on this subject yet and did not mention it in its recent statement. However, we believe that it is evident that the application of the requirements of the Securities Trading Act Wertpapierhandelsgesetz to Bitcoin-MTF would equal a statutory prohibition of such structures. According to BaFin, especially Bitcoin exchange offices meet these requirements.
As a bottom line, it can be concluded that BaFin uses its statement to inform the Bitcoin-industry that it considers the commercial trading of Bitcoins to be a regulated activity.
Only the kind of regulation and the requirements in detail depend on the individual structure of the trading platform. BaFin warns users of Bitcoins Furthermore, BaFin follows the present trend of European supervisory authorities to warn about the risks when dealing with Bitcoins.
However, the same risks threaten legal tenders, e-money or any other objects of value, whether physical or digital. According to BaFin, it is likely that low transaction costs — one reason for the increasing popularity of Bitcoins — will rise, because the generation of Bitcoins through computers is going to become more and more complex.
BaFin assumes that costs will align with the common banking costs, due to the growing demand for heavier hardware and electricity. Here, BaFin addresses an important issue.
As a fact, transactions in Bitcoins may slow down because of increased transaction costs. Some users — especially speculators — might get deterred and prices for Bitcoins could cool down and become steady.
This is illegal in essentially every jurisdiction. Where is Bitcoin Mining Illegal? Bitcoin mining, as well as the possession and use of bitcoin, is illegal in a few countries.
In other countries, bitcoin use and mining is more ambiguous with the government sending mixed messages. Bitcoin is currently banned in Russiaalthough the most recent legislation to ban bitcoin use and mining was actually withdrawn. The reason for the withdrawal seems less about outlawing bitcoin, and more over the extent of punishment. Some Russian authorities want people who use bitcoin to face multi-year sentences in jail.
The Short Story: What is bitcoin mining
Others are advocating for a softer touch. The legal status around bitcoin mining is a bit ambiguous since no formal laws have been passed, but for now mining in Russia is a high risk proposition, at the very least. No other country is as anti-bitcoin as Russia. Of course, Russia is known for being a relatively authoritarian country.