Crypto-Mats

Austrian startup excels in Bitcoin ATMs

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Gambling was never easier. Source: YouTube / Daniel Stockley

Stroll into the lobby of Vienna’s hip Hotel Schani and you’ll find something unusual: an ATM for buying Bitcoin. The touchscreen reveals the current exchange rate, updated every minute. For a brief moment, you could buy 1 Bitcoin at €7,426.44 (around $9100), though many only acquire fractions of a coin.

The machine belongs to Cointed, an Austrian startup now headquartered in Hong Kong. Unlike its competitors such as Bitpanda, Coinfinity and Kurant, Cointed is dipping its fingers into all areas of the cryptocurrency business, from mining and trading to sales and ATMs, which function less like typical bank ATMs and more like Bitcoin vending machines. The company operates 123 cryptocurrency ATMs in Austria and Eastern Europe – almost half of the rapidly increasing total in Europe, according to bitcoinatmmap.com. At one of its machines, Cointed’s customers can buy Bitcoin and other lesser-known cryptocurrencies including Monero, Litecoin, Ether, and Dash.

The machines eliminate the hassles of online trading platforms and for transactions under €500, Cointed has no identification requirements, upholding a key tenet of early cryptocurrencies: anonymity.

Users generally can’t exchange Bitcoin for cash but they can trade cash for Bitcoin and, within minutes of payment, Bitcoins can be transferred to the user’s smartphone – similar online transactions can take minutes and even hours. The company claims it has 30,000 registered customers with 90,000 transactions every month. Last year, it had sales of €150 million.

Cointed does not have a single ATM in Germany, a laggard in the adoption of crypto-ATMs.

The startup has ambitious plans, despite the recent slump in the value of cryptocurrencies following last year’s breathtaking Bitcoin rally. “Our next move will definitely see our focus shifting to Asia, but for that, we need a strong basis in Europe,” says Albert Sperl, Cointed’s marketing boss. The company also needs to reassure potential users, some of which have been put off by tales of theft and hacking. So Cointed advises using a so-called “hardware wallet,” a small device which looks like a USB stick and stores private Bitcoin keys offline.

Bitcoin equipment is a hotly contested market. Cointed has been accused of stealing technology by a competitor and former partner, General Bytes, a charge it vigorously denies.

To date, Cointed does not have a single machine in Germany, a laggard in the adoption of crypto-ATMs. Germany’s main financial regulator, Bafin, says a banking license is needed to operate cryptocurrency machines, costing hundreds of thousands of Euros. Undaunted, Cointed says it is applying for one. “As soon as the legal situation changes, we’ll have 800 up and running in a very short space of time,” says Mr. Sperl.

Hans-Peter Siebenhaar is Handelsblatt’s correspondent in Vienna and specializes in media and telecommunications coverage. Brían Hanrahan adapted this story into English for Handelsblatt Global. To contact the author: siebenhaar@handelsblatt.com

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