November 14, 2023
FIN LAW comments on the draft bill for the FinmadiG
On 23 October 2023, the Federal Ministry of Finance (BMF) invited associations and experts from the German crypto industry to comment on its draft bill for a Financial Market Digitization Act (FinmadiG). In response to this invitation, FIN LAW lawyers Lutz Auffenberg, LL.M. (London) and Dr. Konrad Uhink commented on the planned introduction of a new Crypto Markets Supervision Act (KMAG) and on proposed amendments to the German Banking Act (KWG), which are intended to regulate the transition from the current national crypto regulation to the MiCAR regime. FIN LAW is particularly critical of the very short transition period of only until 31 December 2025 for crypto asset service providers operating on the basis of national BaFin licenses to obtain a MiCAR license. In addition, lawyer Lutz Auffenberg, LL.M. (London) and lawyer Dr. Konrad Uhink question the proposed terms “cryptographic instrument” and “qualified crypto custody”. While the term “cryptographic instrument” seems unnecessarily complicated in their view, the new financial service of qualified crypto custody must be clearly distinguished from crypto custody under MiCAR, as it relates exclusively to the custody of cryptographic instruments, while it does not entitle the custodian to safeguard crypto assets within the meaning of MiCAR. In this respect, it is not a qualified form of crypto custody, so that its designation as “qualified” is misleading.
The statement on the consultation of the BMF is available on the BMF website as well as via the button below.