After several years of ups and downs of cryptocurrencies, one can now speak about the emerging sphere of crypto asset management, although the process of its evolution is still ongoing.
For example, recently the German Federal Financial Supervisory Authority (BaFin) has issued and made it publicly available the “Guide to Authorization Applications for the Crypto Business”. In this article, we will examine in more detail the main provisions of this guide, so the article will be relevant for those who decide to keep up with the latest trends and register a crypto company in Germany.
German token and cryptocurrency regulation
When the fifth Anti-Money Laundering Directive came into force, many tokens and cryptocurrencies in Germany began to fall within the definition of crypto assets.
If you plan to start crypto activities in Germany, please note that the storage and administration of crypto assets as crypto-depository services is now a financial service that requires mandatory authorization. Anyone who wishes to register a German crypto exchange must obtain prior permission from BaFin and apply for a license.
How to log in?
To register a cryptocurrency exchange in Germany, you must go through the same set of procedures as for registering any other financial services institutions. And yet, some differences do occur. For example, of particular relevance to the type of authorization procedure is whether the provider is limited to crypto-depository services only or wants to provide additional classic financial services regulated by MiFID II. The difference is significant.
In the first case, the German requirements for the authorization procedure apply; in the second case, the relevant EU regulations.
Companies that currently provide the above services must submit their full licensing application by November 30, 2020; other firms can start their activities only after they receive a license for crypto activities in the EU.
What steps is the applicant taking to get authorized?
In his application for authorization, the applicant must demonstrate that he fulfills all the conditions for obtaining a license in Germany. These conditions include:
- Proof of sufficient starting capital of at least 125,000 euros;
- Proof of the reliability of the holders of a significant stake;
- Proof of the reliability and professional competence of managers;
- Presentation of proper business organization: in particular: IT strategy and IT security.
- Presentation of a business plan;
- Plans for balance sheets and income statement (P&L) for the first three full working years; Overview of the organizational structure of the company;
- Review of internal control procedures.
It is also important to note that the application for authorization is paid.
BaFin also pays close attention to IT security and anti-money laundering. In the near future. The German regulator intends to publish separate information about the obligations of cryptocurrency against money laundering.
If you intend to start a crypto business in Germany, you should monitor all changes in the law. To do this, you can sign up for legal advice on the regulation of crypto activities in the EU by contacting IQ Decision UK.
Experienced lawyers will help you establish a cryptocurrency exchange in Germany, register an ICO in the EU and obtain the necessary licenses to carry out your activities in the EU member states. You can sign up for a consultation by filling out the form for quick contact.