The Crypto custody business has been introduced as a regulated financial service in Germany a little over a year ago. But even prior to BaFin issuing the first explicit authorization to the first provider, the German legislator already plans to change the legal definition of the activity again.
The German legislator intends to introduce the new financial service of crypto security registry management to the German Banking Act. But which activities shall be covered, who will need an authorization and what will be the requirements will have to be fulfilled by applicants?
The German legislator intends to also extend the crypto custody business with the introduction of crypto securities. What does crypto custody business consist of in the future, what will be permitted and what will be prohibited?
While the custody of traditional securities always requires a depository bank, security tokens can be taken into custody by crypto custody service providers or they can even be held in custody by the investor himself. What are the advantages of digital custody?
Crypto custody business does not only include the custody, but also the administration of crypto assets. What exactly are the requirements that BaFin places on this variation of the crypto custody business which is subject to authorization and can it be fulfilled by delegating DPoS-coins?
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:
Reporting is among the most important duties of all institutions being under supervision of BaFin and the German central bank. But what are the reporting obligations of licensed crypto custodians and are there differences between crypto custody service providers and other financial service institutions?