BaFin details licensing process for foreign crypto custodians

Companies which are already holding digital assets for Germans would not be penalised for not having a license, according to Germany’s Financial Supervisory Authority (BaFin). They would benefit by the same protection that crypto custody firms based in Germany already have under the new law, which went into effect on January 1, 2020.

These companies must also announce their intent to apply for a license by March 31, 2020 and apply for the license by November 30, 2020. Furthermore, crypto companies that hadn't been holding crypto for German customers before January 1, 2020 but are interested in expanding into the German market cannot do so until they have received a license first.

Germany drafted the law in response to the European Union’s Fifth Anti-Money Laundering Directive (AMLD5), which requires crypto companies to demonstrate compliance with enhanced know-your-customer (KYC) and anti-money-laundering (AML) procedures.