31. März 2020: Absichtsanzeigefrist für Anbieter des Kryptoverwahrgeschäfts
Hinweis auf Artikel von Dr. Schelling/Hoffmann in Ri-nova 2019, 36 ff.
On 29 November 2019, the German legislator adopted new rules on crypto assets. The new law contains, amongst others, changes to the German Banking Act (Kreditwesengesetz (KWG)), which provide that:
- crypto assets qualify as financial instruments;
- trading with crypto assets and the custody of crypto assets as a service for others require a license from the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)) as a bank or as an investment firm;
- entities that provide no other financial services than custody are exempted from certain rules that apply to other investment firms.
Requirements for a license for the crypto asset business
Entities that require a license solely for the crypto asset business will also have to comply, inter alia, with the following requirements (section 33 KWG):
- an initial capital of €125,000;
- the management must have sufficient experience and be reliable;
- the firm must have a proper business organization (this includes the compliance with the rules applicable to outsourcing and risk management as well as IT security which apply to banks and other investment firms);
- certain notification requirements (i.e. if the capital falls below certain thresholds or if managing directors resign or are appointed).
Entities that provide no licensable services other than the custody of crypto assets are exempted from a number of regulatory requirements that generally apply to investment firms. This mainly applies to certain requirements related to capital buffers, liquidity, and regulatory capital requirements under the KWG as well as the Regulation (EU) 2019/876 of 20 May 2019 (Capital Requirements Regulation (CRR)).
Further licensing requirements
Since the legislator has clarified that crypto assets qualify as financial instruments, any banking business or financial service relating to crypto assets will require a license.
For example, the operation of a multilateral trading system (MTF) that brings together multiple third-party buying and selling interests in financial instruments according to non-discretionary rules, qualifies as a licensable investment service. Depending on the individual set-up, crypto asset trading platforms may qualify as MTFs.
In addition, the purchase and sale of financial instruments as an agent for others qualifies as a licensable banking business or financial service. Thus, if such activity is conducted with respect to crypto assets, the service provider will have to obtain a license as a bank or investment firm.
Pure proprietary trading, which is not provided as a service for others, does not qualify as a licensable business. However, it should be noted that own account trading that is conducted with a view to purchasing and selling crypto assets to customers does not qualify as proprietary trading and may therefore be subject to licensing requirements (section 1 para. 1a cl. 1 no. 4 lit. c) KWG).
Transition periods and preliminary licences
The new provisions will enter into force on 1 January 2020, subject to certain transition periods. Entities which require a license for the custody of crypto assets, or which require a license due to the extension of the definition of “financial instruments”, may notify the BaFin on or before 31 March 2020 of their intention to apply for a license. In such case, the license will be deemed to be awarded on a preliminary basis (as of 1 Januar 2020), provided that they will submit a complete application for a license no later than 30 November 2020.
On 4 December 2019, the BaFin published further guidance on the application procedure. The BaFin also asked entities that intend to rely on the transition period to notify BaFin of such intention before 1 January 2020 on an informal basis. However, this notification is voluntary and does not affect the aforementioned deadline for the formal notification.
Although the deadline of almost one year appears to be long, it should be borne in mind that the preparation of a complete application for a license may require a considerable amount of time and effort.
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Ri-nova 2019, 36 ff.
Titelbild: © Claudia Otto