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Since the prices of Bitcoin, Ether, Litecoin and other cryptocurrencies are approaching new all-time highs these days and more and more institutional investors are interested in including relevant positions of cryptocurrencies into their investment portfolios, also the daily trading volume of the crypto market is increasing accordingly. The 24-hour trading volume over the last couple […]

The German ministries of Justice and Finance this summer proposed new regulations regarding crypto securities in combination with the draft legislation for the introduction of electronic securities. According to the proposed draft, crypto securities are intended to constitute a specific form of electronic securities and differ from them only in the way that they are […]

BaFin substantiated its administrative practice with regards to the obligations arising from the German Securities Trading Act (WpHG), the EU Commission’s Delegated Regulation EU 2017/565 (DV) and other regulations that are applicable to financial service providers with the Minimum Requirements for Compliance (MaComp). The publication provides supervised entities with information about the minimum requirements that […]

The European parliament passed the final version of the long-discussed European Crowdfunding Service Provider Regulation (ECSP) on 7th of October 2020. The new regulation is supposed to go into effect in about one year. Just as any other European regulation it will be directly applicable to European citizens and businesses. A transposition into the national […]

Not all business activities that are related to crypto assets or blockchain are automatically subject to authorization pursuant to the German Banking Act (KWG). The obligation to apply for a BaFin authorization is reserved for business models that involve a banking or financial service and that are related to blockchain units which are either considered […]

and the verification of the first block of the Bitcoin blockchain. The disruptive innovation that enabled users to transfer units of value between each other without the necessity of a centralized settlement intermediary had the potential to circumvent the traditional financial payment system and therefore, at the time – shortly after the banking crisis of […]

The German legislator intends the introduction of electronic securities. It is intended that securities no longer necessarily have to be issued in paper form in order to be tradable in a bone fide, unencumbered way through the introduction of an Electronic Securities Act (eWpG) and several amendments and changes to the German Banking Act, the […]

The German Ministries of Finance and Justice published their long-awaited joint draft legislation concerning the introduction of electronic securities in late July of 2020. The reform proposals included in the draft are not limited to a mere equating of paper-based securities and electronically issued securities to be introduced, but instead the Electronic Securities Act (eWPG) […]

Last week, BaFin published clarifications regarding the operation of crypto ATMs via its website. In this rather short publication pointed out the supervisory authority that the public placement of ATMs at which cryptocurrencies (e.g. Bitcoin, Dash, Litecoin or Ether) can be acquired or sold may constitute proprietary trading or financial commission business in the sense […]

The commercial custody of financial products for customers has become a highly regulated and differentiated service with respect to German supervisory banking regulations. There are not less than three different kinds of custody businesses that are subject to authorization regulated in the German Banking Act (KWG): The depository business, which is qualified as a form […]

BaFin expressly stated in the publication on crypto custody business dated 2nd of March 2020 that it does not consider security tokens as securities in the sense of the German Securities Deposit Act under the current legal framework. This results in the fact that providers offering the custody of security tokens currently do not require […]

With the introduction of the Electronic Securities Act (eWPG), the German legislator intends to create a legal alternative to paper-based securities. The corresponding draft legislation to the eWPG dated 23rd of July 2020, which for the time being shall only be applicable to bearer bonds, therefore proposes the introduction of electronic securities as an alternative […]