BaFin Includes Crypto Custody Business as Service in Banking Act
BaFin notified that crypto custody business has been included into the German Banking Act (KWG) as a new financial service. The law implementing the amendment directive to the fourth EU money laundering directive (Federal Law Gazette I of December 19, 2019, p. 2602) included the crypto custody business as a new financial service in KWG. Companies that want to provide these services require permission from BaFin when the law comes into effect on January 01, 2020. BaFin is providing information on the possibility of a non-binding expression of interest as well as on the binding notification of intent according to the German Banking Act.
Even before the law came into force, BaFin had already asked to express informal and non-binding expressions of interest from companies that conduct the crypto custody business and these companies were, therefore, subject to a license requirement on the basis of the new law. These companies are still encouraged to submit such expressions of interest. The voluntary expression of interest does not replace the formal notification of intent pursuant to "Section 64y KWG."
For a company that becomes a financial services institution as of January 01, 2020, the license for the operation of crypto custody business is provisionally granted if the company submits a complete license application by November 30, 2020 and if it notifies BaFin in writing by March 31, 2020 of the intent to submit a license application. A corresponding regulation exists for companies that require a license due to the extension of the term financial instrument in the sense of "§ 1 paragraph 11 KWG by crypto values on January 01, 2020."
Related Links (in German)
Keywords: Europe, Germany, Banking, Securities, Cryptocurrency, Crypto Custody Business, Financial Services, Money Laundering, German Banking Act, Fintech, BaFin
Previous Article
RBNZ Releases Final Decisions Related to Capital Review for BanksNext Article
BaFin Updates Notes on Reporting Under Solvency IIRelated Articles
APRA Updates Validation and Derivation Rules in September 2020
APRA updated the lists of the Direct to APRA (D2A) validation and derivation rules for authorized deposit-taking institutions, insurers, and superannuation entities.
EC Proposes Frameworks for Crypto-Assets and Operational Resilience
EC adopted a package that includes the digital finance and retail payments strategies and the legislative proposals for regulatory frameworks on crypto-assets and digital operational resilience.
ECB Publishes Opinion on Proposals to Amend Securitization Framework
ECB published an opinion (CON/2020/22) on proposals for regulations amending the securitization framework of EU, in response to the COVID-19 pandemic.
FCA Consults on Regulation of International Firms in UK
FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.
MAS Amends Notice on Capital Adequacy Requirements of Banks
MAS published amendments to Notice 637 on the risk-based capital adequacy requirements for reporting banks incorporated in Singapore.
FCA to Begin to Move Firms to New Data Collection Platform RegData
FCA announced that it will move firms to RegData from Gabriel in the coming months in stages, based on the reporting requirements of firms.
ISDA Expects IBOR Fallbacks to be Effective by End of January 2021
ISDA issued a letter to regulators to flag that it now expects the supplement to the 2006 ISDA Definitions and the Interbank Offered Rate (IBOR) Fallbacks Protocol to be effective around mid- to late-January 2021.
APRA Reviews Repayment Deferral Plans, Identifies Best Practices
APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.
ESAs Assess Risks to Financial Sector After COVID-19 Outbreak
ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.
BoE Confirms Withdrawal of COVID Corporate Financing Facility
BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.
