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  • Initial Exchange Offerings – What is that and Can They Be an Alternative to STOs?
    Some of the biggest internationally operating crypto exchanges started recently to offer so called initial exchange offerings (IEO). For a couple of months now, interested companies can procure funds through this new blockchain funding method by publicly offering their blockchain tokens on platforms like Binance Launchpad, KuCoin, Bittrex IEO, Huobi Prime and OK Jumpstarter. By […]
  • Crypto Custody and Crypto Assets – What Stands Behind the Announced Law Amendments?
    Notice: This blog article refers to the first draft of the German Ministry of Finance dated 20th May 2019 which in this form has not been realized by the legislator. On 20 May 2019, the German Ministry of Finance published its first draft for the transposition of the provisions of the 5. European AML Directive into national […]
  • Security Tokens Always Securities – What are the Implications of the New Administrative Practice of BaFin for STO Emitters?
    BaFin expressed its new, general administrative practice concerning the qualification of security tokens in an article in the BaFin journal of April 2019. Under this new administrative practice security tokens, meaning all tokens granting its owner membership or equity-like rights and that are freely tradable and transferable will be qualified as securities sui generis. This qualification by […]
  • Building a Crypto Exchange (Part IV) – The Crypto Broker
    Eine Krypto Tauschplattform kann auf vielerlei Arten ausgestaltet werden. Die sie ausmachende Kernfunktion ist das Zusammenbringen von Angebot und Nachfrage hinsichtlich der Anschaffung und Veräußerung von Kryptowährungen. Auch Plattformen, die kein automatisiertes Order-Matching-Verfahren bieten oder nicht selbst als Vertragspartner ihrer Kunden beim Kauf oder Verkauf von Kryptowährungen auftreten, sondern sich auf die grundlegende Aufgabe der […]
  • Passporting a Crypto License – Does That Work?
    Europe offers a lot of advantages, especially for financial service providers that are located within the European Union (EU) if it comes to the internationalization of their business model. The progressive harmonization of the legislation regarding financial supervision and the capital markets within the European Union allows supervised and regulated banks and financial service providers […]
  • Building a Crypto Exchange (Part III) – The Crypto Exchange Bureau
    A crypto exchange platform does not always have to be designed comparable to professional stock exchanges for requiring the operator to obtain a BaFin permission. Platforms not automatically matching and executing the buy and sell orders of the users can also be required to acquire a BaFin permission prior to its launch if it is […]
  • STO Without Prospectus – What Are the Possibilities?
    Security tokens are blockchain tokens that are issued via smart contracts and that grant to their owner certain monetary rights like e.g. an interest rate or a participation right on the issuing companies’ profit. In this respect the security token differs from the utility token which grants its holder access to or benefits within the […]
  • Building a Crypto Exchange (Part II) – The Multilateral Crypto Trading Facility
    Bitcoins and comparable cryptocurrencies are, according to BaFin, classified as financial instruments as defined in the German Banking Act (KWG). Therefore, a BaFin license is a mandatory prerequisite for operating a crypto exchange in Germany. What are the requirements to fulfil in order to obtain such license and what are the conceptual design options for […]
  • Valid Transfer Mechanism for Security Tokens
    Besides of the regulatory qualification of security tokens as security, shares in investment funds or alternative investment assets quite a number of private law issues are raised when conducting securities token offerings. The most prominent pitfall when it comes to private law and security tokens is the fact that the German Civil Code BGB in […]
  • Building a Crypto Exchange (Part I) – What are the Regulatory Design Possibilities?
    Since BaFin qualifies Bitcoins and comparable cryptocurrencies as financial instruments, the operating of a crypto exchange requires the operator to be BaFin licensed. But what are the requirements to fulfill in order to acquire such license and what are the conceptual design options that businesses have for meeting these requirements while at the same time […]
  • What are the Regulatory Requirements for Operation in Germany?
    Probably one of the oldest Bitcoin based business models since Bitcoin became popular is the operating of Bitcoin ATMs. ATM is the abbreviation for Automated Teller Machine while a Bitcoin ATM is a machine that changes Bitcoin into bank money and vice versa. In other European countries like Austria, Switzerland or the Netherlands Bitcoin ATMs […]
  • E-Money on a Blockchain: What Serives can a Cypto E-Money Institution Offer?
    Blockchain tokens that are issued by the emitter in exchange for money and that can be exchanged back to a legal tender and that are accepted as a means of payment by others than the issuer can be e-money from a regulatory perspective. But what are the advantages of blockchain based e-money and who would be legally […]
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