BaFin generally qualifies security tokens as securities sui generis. Does that exclude the possibility of designing security tokens as asset investments under the German Asset Investments Act and if not, what are the advantages of crypto based asset investments for the issuer and distributers?
By regulating crypto custodian services as a financial service, the German legislator chooses a non-european but national regulatory approach. But will this national crypto custodian license potentially be vaild in other european countries as well?
The German federal government plans to design crypto custody services as exclusive financial services. In addition to the custody of crypto assets, the crypto custody service providers shall not be permitted to offer any other financial or banking service that would also require a BaFin authorization. Crypto custody service providers shall therefore be limited to their core business but shall also play a central role in the German crypto market.
The German legislator plans to regulate crypto assets as financial instruments. But what would be the consequences of such regulation and would there be any important changes to the current regulation of crypto?
It can be read in many publications that the German Debenture Bond Act would not be applicable to bonds based on security tokens instead of paper documents. But is this really the case and why is this qustion of importance to security token issuers?
Would this regulation go even beyond the regulation of traditional payment services? What would the new interpretive note to recommendation no. 15 of the FATF mean for the use of cryptocurrencies and would there be any financial privacy left?
Under which conditions do startups have the possibility to conduct Security Token Offerings on basis of a so called security information sheet instead of a full securities prospectus approved by BaFin and are there any special implications to face?