BaFin released guidance on its expectations for undertakings seeking to provide the crypto custody business, which the authority considers to be particularly important for the authorisation process.
The German Act implementing the Amending Directive on the Fourth EU Anti-Money Laundering Directive included crypto custody business in the German Banking Act (Kreditwesengesetz – KWG) as a new financial service. Since the Act came into force on 1 January 2020, undertakings wishing to provide this service are required to apply for an authorisation from BaFin.
This guidance provides undertakings intending to apply for authorisation for crypto custody business within the meaning of section 1 (1a) sentence 2 no. 6 of the KWG with initial guidance on the aspects which BaFin considers to be particularly important for the authorisation process.
The expectation expressly applies for crypto custody business, but not for existing administrative practice in relation to banking business or other financial services. The guidance is not exhaustive and the relevant statutory provisions, circulars, guidance notes and summaries provided by BaFin and Deutsche Bundesbank should be taken into consideration as well.