NFT

NFTs fall outside the scope of MiCAR, thus offering plenty of scope for innovative business models. But what specific use cases does the technology offer besides tokenized image usage rights, and when is an NFT actually unregulated?

Since the beginning of the year, crypto custody has been regulated by MiCAR, and the German regulation of crypto custodians according to the KWG has been replaced. However, a small sub-area remains at the national level and in individual cases this can affect NFT.

NFTs are excluded from the scope of MiCAR, which is why NFT-based business models are generally not covered by the regulation. However, there remain borderline cases in which crypto service providers are nevertheless subject to regulatory obligations.

BaFin has published its administrative practice on NFT. When is a capital market prospectus required, when are crypto asset service providers in need of a BaFin license when dealing with NFT?

The question if NFTs and business models relating to them should be subject to MiCAR was controversially discussed and unclear for a long time. A compromise was reached in the end which now causes legal uncertainty.

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 […]