Crypto Custody

MiCAR was published in the Official Journal of the EU last week. Until the rules on the regulation of crypto custodians apply, the German legislator will have to think about adapting or abolishing their national KWG regulation of crypto custodians.

Securing the crypto assets of clients is essential for regulated crypto custody providers. Together with the Frankfurt-based xMarkets Consulting FIN LAW publishes a paper on the most important aspects.

Crypto management is a regulated activity in Germany. However, it is not quite clear which specific services are included in this activity.

Even though crypto custody services are of great importance for centralized service providers in the crypto market, only small profits are possible. Would allowing of interest for crypto balances held in custody by the crypto custody service provider be covered by the authorization to conduct crypto custody business?

Crypto lending has become a popular way to generate passive income. As a matter of fact, service providers begin to create business models in such settings. But can these service providers be subject to authorization pursuant to German regulatory law?

Counterfactual wallets are a decentralized crypto wallet solution which is meant to increase the protection of wallet owners against the loss of private keys. But can the offering of counterfactual wallets to clients be an activity that is subject to authorization despite the decentralized nature of these wallets?

Crypto custody providers as well as operators of crypto security registries enjoy generous exemptions, especially with regards to the regulatory capital requirements. But are these exemptions still applicable, if a crypto custody service provider additionally acts as a crypto securities registry operator?

Holders of crypto assets that are suitable for the so-called delegated staking may delegate their crypto assets to a staking provider in order to participate in the underlying consensus mechanism for the validation of transactions in the network. The rewards for the abovementioned participation are newly issued blockchain units, which are generated and issued by […]

On the 26th of June 2021, the new supervisory regime for investment firms – the Investment Firms Act (WpIG) – will go into effect in Germany. The new regulation will be relevant for all businesses which offer financial services such as investment brokerage, investment advisory services, proprietary trading or financial portfolio management and comparable services. […]

The crypto custody business is currently the youngest financial service regulated in the German Banking Act (KWG). As of January 1st, 2020, the custody, management and safeguarding of crypto assets or private keys that serve for storing, holding or transferring crypto assets for others is regulated as a financial service that is subject to authorization. […]

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) […]