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Next to the credit business, the deposit business is probably the most prominent banking business. According to the legal definition, deposit business is conducted, if unconditionally repayable funds are accepted by a third-party. However, the definition of deposit business intends for an important exemption for cases in which the repayment claim is securitized in bearer […]

Currently, Non-Fungible Tokens (NFT) are in the state of a real hype. Unlike other blockchain tokens NFTs are not fungible in the sense that they are not interchangeable with other, identically designed tokens of the same kind. They are rather individual tokens which each represent a specific right or object. In this context, the idea […]

By the end of April, BaFin announced via their website that they have reasons for suspecting that a well-known crypto exchange publicly offers securities in the form of so-called stock tokens in Germany without required security prospectuses. Stock tokens are one of the newest innovations in the crypto industry. The way that a stock token […]

 The German Bundestag passed the new Investment Firms Act (WpIG) on the 15th of April 2021. The new legislation is scheduled to go into effect on the 26th of July 2021 and is intended to implement the statutory requirements of the European Investment Firms Directive (IFD). The new law will exclude small and medium-sized investment […]

Prior to start of operations in Germany most blockchain-based business models require BaFin authorization, because of the legal qualification of most cryptocurrencies as financial instruments in the sense of the German Banking Act (KWG). The German legislator explicitly confirmed his administrative practice of BaFin being in place already since 2011 by explicitly regulating crypto assets […]

Over the last years, so-called token sales have emerged as a new method of financing for businesses. By such, companies that seek funding offer interested investors their self-created blockchain tokens for purchase. These tokens allow their bearers the assertion of certain connected rights vis-à-vis the issuer. The rights that can be associated with the tokens […]

The public offering of security tokens on the crypto markets for financing purposes has become a viable alternative for innovative businesses since 2017. The options for funds-seeking companies range from the issuance of so-called utility tokens, which resemble a digital voucher usable exclusively within the business model of the token issuer to so-called security tokens, […]

Germany assumed a unique position within the European Union early on, concerning the regulation of cryptocurrencies and business models relating to blockchain technology. Shortly after the emergence of bitcoin as the first cryptocurrency, BaFin established for the German jurisdiction that Bitcoin and comparable cryptocurrencies such as Litecoin shall qualify as units of account and therefore […]

In Germany, companies often require prior authorization from BaFin for commercial handling of cryptocurrencies if their offered services qualify as banking businesses or financial services. For example, the operation of an exchange platform, which enables users to trade cryptocurrencies will regularly qualify as a financial service, which is subject to authorization either because it qualifies […]

In the last couple of months, Bitcoin gained attention primarily as a very attractive investment opportunity. At this point in time, not only a few adventurous private investors, but also more and more institutional investors such as investment funds and investment banks invest in the best-known cryptocurrency. Even though Bitcoin is currently recognized as the […]

With the rise of blockchain-based smart contracts, the subject of tokenization also gained in relevance. The decentralized issuance of tokens, which are transferable between users of a network without an intermediary enables the digitization of all kinds of objects from a technical point of view. Tokenization rapidly became a prominent topic in the field of […]

For several month now, projects that provide applications within the decentralized financial markets continue to gain in significance. The buzzword Decentralized Finance or its abbreviation DeFi relates to smart contract applications (DApps), which enable users to conduct business on the financial markets without the need of a central service provider. The most prominent examples are […]