BaFin just published its “Guidelines on application for authorization for crypto custody business” shortly after the deadline for the so-called grandfathering option for crypto custodians expired. A summary:
Financial service providers and banks are required to develop an adequate risk managing strategy for their business operations. What are the requirements that BaFin is going to place on crypto custody service providers that additionally have to deal with crypto-specific risks?
As of next year, the crypto custody service will be introduced in Germany as a new form of financial service that is subject to an authorization requirement. One of the key questions for future crypto custodians will be “what are the regulatory requirements that have to be fulfilled in order to obtain the mandatory BaFin authorization?” The second part of our multi-part blog “Let’s Build a Crypto Custodian” tackles the question of the required minimum starting capital.
Last week, the German Parliament finally decided on how to regulate crypto custodians as of 2020. In the first part of our blog series “Let´s build a Crypto Custodian” we take a look at the requirements that managing directors of crypto custody service providers will have to fulfil in order to be accepted by BaFin.